The Central Bank of Nigeria (CBN) debited banks to the tune of N118 billion last Friday over a breach in a curious Cash Reserve Ratio (CRR) rule.
The latest debit is the fourth by the CBN this year and brings the total sector debits for 2020 to about N2.2 trillion.
The move brings “further downward pressure on banks liquidity ratios and earnings,” according to Tunde Abidoye, an analyst at Lagos-based FBN Quest.
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Unlike previous debits for which Zenith and United Bank for Africa (UBA) were the most affected banks, Stanbic IBTC and GT Bank were the hardest hit this time around, both with debits of N15 billion each.
“Based on the total sum that each bank has been debited this year, and our NIM assumptions for each bank, we estimate an aggregate opportunity cost of funds of N86bn for our universe of banks coverage,” Abidoye said in a note to clients.
Due to the sizable debits on their accounts with the CBN, Zenith and UBA have the highest opportunity cost of funds at N34.4bn and N15.8bn respectively.
In contrast, Fidelity and Access are the least impacted, with the opportunity cost of funds of N2.9bn and N3.8bn respectively.
