The Nation Newspaper

Tag: liabilities

  • Banks’ assets, liabilities cross N32tr mark, says CBN report

    The total assets and liabilities of commercial banks stood at N36.2 trillion at the end of August 2018, the Central Bank of Nigeria (CBN) economic report released yesterday has shown.

    The figure, which is for the third quarter, represented 0.8 per cent increase over the level at end-June 2018.

    The funds were sourced, largely, from mobilisaion of unclassified and foreign liabilities, and realisation of claims on the apex bank. The funds were used, mainly, for payment of matured demand deposits, accretion to reserves and extension of credit to the private sector.

    According to the report, the CBN also maintained a non-expansionary monetary policy stance in August 2018, aimed at further curbing inflationary pressure. It said broad money supply (M3), on quarter-on-quarter basis, fell by 2.4 per cent to N33,607.64 billion at end-August 2018, in contrast to the growth of 2.0 per cent at end-June 2018. The development reflected, mainly, the 3.4 per cent decrease in domestic credit (net) of the banking  system.

    Over the level at end-December 2017, broad money supply, (M3), grew by 7.9 per cent, due to 18.6 per cent and 6.2 per cent increase in foreign assets (net) and other assets (net) of the banking system, respectively. On quarter-on-quarter basis, narrow money supply (M1), fell by 6.9 per cent, due, to 2.3 per cent and 7.7 per cent decrease in its currency outside banks and demand deposits components, respectively.Developments in banks’ deposit rates were mixed, while lending rates trended downwards in the review quarter.

    Further analysis of the report showed that with the exception of the one-month and 12-months deposit rates, which rose by 0.28 and 0.07 percentage point to 9.12 per cent and 10.07 per cent, respectively, all other deposit rates of various maturities fell from a range 3.75 – 10.67 per cent to 3.65 – 9.85 per cent at end-September 2018.

  • Discount Houses’ assets, liabilities rise 20% to N187b

    Discount Houses’ assets, liabilities rise 20% to N187b

    The  total assets and liabilities of discount houses stood at N187 billion in October, showing an increase of 20.4 per cent above the level at end-September last year, a Central Bank of Nigeria (CBN) report on the subsector has shown.

    The development was accounted for, largely, by the 43.5 and 24.9 per cent rise in claims on banks and claims on the Federal Government, respectively.

    Correspondingly, the increase in total liabilities was attributed, largely, to the 66.4 and 29.5 per cent rise in borrowings and money-at-call, respectively.

    It said discount houses’ investment in Federal Government securities of less than 91-day maturity rose to N69.0 billion and accounted for 45.7 per cent of their total liabilities.

    At that level, discount houses’ investment in Nigeria Treasury Bills rose by 31.1 per cent above the level at the end of the preceding month.

    Thus, investment in Federal Government securities was 14.3 percentage points below the prescribed minimum level of 60 per cent. Total borrowing and amount owed by the discount houses was N58.4 billion, while their capital and reserves amounted to N28.6 billion.

    CBN data indicated that growth in the key monetary aggregate contracted in October 2014. On month-on-month basis, broad money (M2) fell by 1.5 per cent, in contrast to the growth of 2.7 per cent in the preceding month.

    The development reflected the 9.1 per cent fall in foreign asset net of the banking system, which more than offset the effects of the 0.9 and 4.1 per cent growth in domestic credit (net) and other assets (net) of the banking system, respectively.

    Similarly, narrow money supply (M1) declined by 1.5 per cent below the level at the end of the preceding month due to the 4.6 and 0.7 per cent fall in its currency and demand deposit components, respectively. Over the level at end-December 2013, however, M2 grew by 4.2 per cent. Reserve money (RM) rose by 4.0 per cent at the end of the review month and was below the quarterly benchmark.

    Available data indicated mixed developments in banks deposit and lending rates during the review month. The seven- day and 12-month deposit rate fell from 4.54 and 9.31 per cent to 4.43 and 9.23 per cent, respectively, while the average savings deposit rate remained at 3.43 per cent same as in the preceding month.

  • DMBs grow assets, liabilities to N23tr

    Assets and liabilities of deposit money banks (DMBs) currently stand at N23.1 trillion, a report by the Central Bank of Nigeria (CBN) has stated.

    The figure which is for August 2013, indicated an increase of 1.8 per cent above the level at the end of the preceding month.

    The report indicated the funds were sourced mainly from Federal Government deposits and reduction in claims on Central Government. The funds were used, largely, in the building up of reserves and in the extension of credit to the private sector.

    Also, commercial banks’ credit to the domestic economy fell by 3.9 per cent to N11.5 trillion, which is below the level in the preceding month. The development was attributed largely to the 89.3 per cent decline in banks holding of treasury bills and FGN Bonds during the review month.

    Total specified liquid assets of the banks stood at N6.6 trillion, representing 42 per cent of their total current liabilities. The report explained that at that level, the liquidity ratio fell by 8.5 percentage points below the level in the preceding month, but was 22 percentage points above the stipulated minimum ratio of 30 per cent.

    According to the report, the loans-to-deposit ratio, at 32.7 per cent, was 1.4 and 38 percentage points below the levels at the end of the preceding month and the prescribed maximum ratio of 80 per cent, respectively.

    The report showed that total assets of the discount houses stood at N231.73 billion at August ending, showing a decline of 9.2 per cent below the level at July ending. The development was accounted for, largely, by the 18.9 and 1.4 per cent decline in claims on the Federal and State Governments, respectively. Correspondingly, the decline in total liabilities was attributed, largely, to the 18.9 and 28.2 per cent fall in other amount owed to commercial banks and other liabilities, respectively.

  • Unpaid subsidy claims: Federation Account may incur liabilities, says NNPC

    Unpaid subsidy claims: Federation Account may incur liabilities, says NNPC

    • Poor revenue collection wipes out residue fund

    The Nigerian National Petroleum Corporation (NNPC) has warned that the Federation Account (FA) is under threat of incurring contingent liabilities if the it is not paid its subsidy claims, The Nation has learnt.

    A source, who asked not to be named, said NNPC has not been paid its claims since February, last year, resulting in a debt overhang of N1.093 trillion to the Account.

    According to the minutes of the meeting of the Federation Account Allocation Committee (FAAC) meeting of May 2013, it was observed the NNPC was asked to give an update on the N1.093 trillion it owes the FA.

    In response, the representative of the NNPC at the meeting, said the NNPC’s “position on matter had not changed.”

    The unchanged position of the NNPC on the debt it owes the FA the representative said, is because “the corporation has not been paid any subsidy claim since February 2012, whereas other oil marketers continue to receive subsidy claims every month.”

    He said: “There was contingent liability on the FA arising from NNPC supply of petroleum products for domestic consumption.”

    These are liabilities that may be incurred by an entity depending on the outcome of a future event, such as a suit, a source clarified.

    The NNPC representative at the FAAC meeting was said to have added that “the debt against the corporation would reduce when its subsidy claims are paid.”

    This explanation did not, however, go down well with the state commissioners of finance, as the Finance Commissioner from Ebonyi State, and the Chairman of the Finance Commissioners Timothy Odaah said “that the Post-Mortem Sub-Committee had discovered that the NNPC was maintaining an account called ‘Development Fund Account,’ and that $103.7 million was domiciled in it. He suggested that the money should be used to pay off NNPC debt.

    Reacting to the issues raised, the Chairman of FAAC and Minister of State for Finance, Alhaji Yerima Lawan Ngama, explained that “a detailed exercise on NNPC listings was carefully carried out, and that the corporation was advised to stick to its original format for rendering it’s report”.

    On the $103.7 million account, he said the NNPC “cannot maintain any account relating to FA matters without the approval of the Accountant-General of the Federation (AGF)”. He promised to look into the matter.

    He also said: “Revenue collections into the Federation Account (FA) were consistently falling below expectations,”citing the low performance of the NNPC, the Federal Inand RevenueService (FIRS) and the Nigerian Customs Service (NCS).

    Ngama said collections were below the monthly budget, and that the situation was eroding the savings earlier recorded, hence there was no residue funds to drawn from. This may explain why there was no augmentation for June.

    He pointed out that the unfolding monthly revenue performance, clearly showed that the 2013 budget projections were unrealistic.

    However, he assured the meeting that the government was working to improve the situation and that all the outstanding arrears would be paid.

    Members were not satisfied with the explanation of the chairman. They resolved not to continue the meeting until the outstanding arrears were paid.

    However, the chairman impressed on members not to see the Federal Government as not concerned with the economic well-being of the states and local governments.

    He pointed out that the Federal Government was faced with greater financial predicaments than the states noting that the federal government was more desirous in getting the unpaid outstanding arrears from the FA than the states in view of its huge wage bills. He informed the meeting that any other outstanding arrears would be paid by August, 2013.

    The minuteof the May, 2013 meeting said the commissioner of finance from Niger state urged the chairman to endeavour to carry along FAAC members on certain issues, this he said would create and sustain better results at FAAC meetings.

  • Abia’s liabilities greater than assets, says Orji

    Abia State Governor Theodore Orji has said the state would continue to prioritise its projects in line with its assets, which he said are less than the liabilities.

    The governor said the era of ad hoc projects are over in the state.

    In a statement by his Public Affairs Adviser, Ben Onyewere, the governor said: “The most important priority of this government is to provide a bedrock for the welfare of the people through the provision of an enabling environment to enhance the capacities of employment generation, sound and basic education and feasible health care facilities. These were not available before we came on stream.”

    The governor decried playing to the gallery while tackling the immediate needs of the people, including rehabilitating their living standard.

    He said: “Some of the challenges facing the government are embedded in the disparity between the infrastructural deficit and available funds. This is because nobody can command an economy. There is no magic wand around it. It is for this reason the state government is asking the Federal Government to grant Aba the special status it deserves.

    “This yawning gap was the reason the people called for the probe of the past administration because Abia was an abandoned property due to the recklessness of the past.

    “Abia existed without a Government House, a conference centre, realistic educational and health programmes, besides the enormous task of provision of roads, before this administration came in.”

    Orji said the era of spending the state funds on ad hoc projects are over.

    He spoke yesterday at the inauguration of electricity and bore-holes at Umuuwaya-Mbara in Amuzukwu Area of Umuahia North.

    The projects were part of the constituency of the lawmaker representing Oluchi Ibeji, Ikwuano/Umuahia Federal Constituency.

    Represented by Mr Vigilus Nwankwo, the Commissioner for Public Utility, Orji said the state government would only embark on quality and enduring projects known under as “legacy projects”.

    He said his administration had embarked on projects to reposition the economy of the state.

    Orji said: “When we came on board, the contract for the execution of 133/132 injunction substation at Ohiaya was moving at a snail speed.

    “Though a federal project, we awarded the contract for the provision of five feeders, now assisting evacuation of power from Alaoji to Umuahia.’’