Lending by Nigerian banks drop 4.6%
The Central Bank of Nigeria has said that lending to domestic businesses by Nigerian banks dropped by 4.6% to N13.1 trillion (US$1=155 Naira) in August.
The bank's monthly report for September 2013 indicates that the development is a sharp contrast to the 4% growth in bank lending recorded by the end of July 2013.
The Nigerian apex bank linked the drop in lending to claims on government assets.
'At N13.18tn, aggregate banking system credit to the domestic economy decreased by 4.6 per cent, on month-on-month basis, in contrast to the growth of 4.0 per cent at the end of the preceding month.
”The development reflected, largely, a decrease of 47.4 per cent in claims on the Federal Government (net), attributed to the 14.2 and 0.8 per cent decline in banking system's holding of treasury bills and FGN Bonds, respectively,” the local media Monday quoted the CBN report as saying.
'Over the level at end-December 2012, aggregate banking system credit to the domestic economy rose by 3.9 per cent, due largely to the increase of 6.3 per cent in claims on the private sector,' the report said.
The report also showed that banks lending to the Nigerian government in August fell by 47.4%.
However, the banking system credit to the private sector rose by 1.9 % to 16.1 trillion naira at the end of August, compared with the increase of 0.7% at the end of the preceding month.
In the report, foreign assets in the banking system increased by 0.9 % to 8.9 trillion naira at the end of August, compared to a decline of 1.2% at the end of July.
The CBN attributed the development to the 3.5% increase in banks' holdings of foreign assets.