BANKS BORROW N2.17TRN FROM CBN, FG'S REVENUE DECLINES BY 11.2%

Banks across the country recorded sluggish growth with just two per cent increase in total assets and liabilities at the end of April 2012.

The growth level followed the general performance trend since the beginning of the year, as total assets and liabilities of the banks grew by a marginal 2.5 per cent in the first three months of the year.

In the bid to sustain their operations, the banks resorted to borrowing from the Central bank of Nigeria (CBN) to fund their settlement accounts.

The CBN Economic Report for April revealed that banks borrowed a whopping N2.17 trillion from the apex bank through the Standing Lending Facility (SLF) to bridge the shortfall in their liquidity positions.

At N19.880 trillion, deposit money banks' (DMBs) total assets and liabilities rose by 2.5 per cent in the first quarter (Q1) 2012.

The report also showed that estimated Federal Government's gross federally-collected revenue stood at N899.94 billion in April 2012, showing a decline of 11.2 per cent below the receipts in the preceding month.

The amount however exceeded the monthly budget estimate by 32.2 per cent. The decline in oil receipts relative to the level in the preceding month was attributed, largely to the decline in crude oil exports as a result of several operational issues and safety challenges in Bonga, Brass, Bonny and Qua Iboe terminals.

Gross non-oil receipts, at N169.03 billion or 18.8 per cent of the total was 25.6 and 33.6 per cent lower than the receipts in the preceding month and the monthly budget estimates, respectively. The decline relative to the receipts in the preceding month's level reflected, largely, the decline in independent revenue of the Federal Government.

According to the CBN total SLF granted to banks during the period under review was N2.173 trillion, indicating an increase of 30.5 per cent over the N1.66 trillion granted in March 2012.

The CBN uses the SLF as an overnight lending option to banks with deficits in their settlement accounts at a fixed interest rate of 14 per cent which is the upper band of the Monetary Policy Rate.

The apex bank says it stands ready to supply any amount the banks may require in order to achieve a stable value of the Naira through stability in short-term interest rates.

Current data indicate that banks' total assets and liabilities stood at N19.886 trillion, showing a marginal increase of 0.2 per cent above the N19.880 trillion recorded at the end of March 2012.

The CBN said the funds were sourced mainly from increase in Federal Government deposit which stood at N131.3 billion, while deposit mobilisation and unclassified liabilities accounted for N128.0 billion and N125.2 billion respectively.