Banks’ vaults are surging with customer deposits, despite the economic hardship being experienced by majority of Nigerians.
The Central Bank of Nigeria, CBN, in the latest report on money and credit situation in the country shows that banks’ demand deposits in the first nine months of this year rose by 16.5 percent to N31.08 trillion at the end of August from N26. 68 trillion recorded at the end of December 2023.
Details of the report also show that the total demand deposits in the first quarter of the year ended March, QI’24 stood at N28.9 trillion, indicating 8.1 % increase over N26.7 trillion recorded in December 2023.
In the second quarter of the year, Q2’24 the banks’ deposits increased by14.3 percent to N33.0 trillion at the end of June from N28.7 trillion in March 2024, QI’24.
Meanwhile, the audited reports and regulatory filings by commercial banks and their holding companies on the Nigerian Exchange, NGX showed that the banking sector’s total deposits stood at about N136 trillion in first half of 2024 , representing 18.3 percent increase over the N115 trillion recorded in same period of 2023.
The audited reports showed that the banking sector total deposits rose by 63 percent to about N115 trillion in the 2023 full year from N70.5 trillion in 2022. This may be an indication that individuals and institutions are increasingly holding their assets in cash, but the development may have largely been fueled by the inflationary environment.
Meanwhile, in another development, the CBN’s latest report shows that the Nigeria’s money supply (M2) surged to a new high of N107.1 trillion in August 2024, marking a 0.75 per cent month-on-month (M-o-M) increase from N106.3 trillion in July and a 5.6% rise from N101.4 trillion in June, according to the latest figures from the Central Bank of Nigeria (CBN).
This sharp rise in liquidity continues to pose challenges for the CBN’s Monetary Policy Committee (MPC) as it grapples with balancing economic growth and controlling inflation.
The money supply has now risen by a whopping 65% in the last year from N64.8 trillion recorded in August 202
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