New CBN LDR Target Met By 4 Banks

By Emmanuel Aziken, Editor

Even before the ring of the bell at least four banks have been projected to have met the Central Bank of Nigeria, CBN threshold of 65% Loan to Debt Ratio.

The four banks include Fidelity, Sterling, Stanbic Chartered and Access Banks. The study conducted by Coronation Merchant Bank of eight banks also found that First Bank of Nigeria and Guaranty Trust Bank, GTB two of the biggest retail banks were among the Tier 1 banks that didn’t meet the 60& LDR stipulated by the CBN as at 30 September, 2019.

The two banks were among those the apex bank sanctioned by adding a total of N499 billion into their statutory reserves kept with the apex bank.

The aim of the Godwin Emefile led CBN has been to use the policy of increasing credit to businesess as a way of boosting the Gross Domestic Product, GDP. With the 5.3% increase in credit between July and September when the 60% threshold obtained, the apex bank would have been pleased, a development that may have nudged it to increase the threshold to 65%.

However, for many of the banks the pressure from the CBN to increase credit is faced with the hazard of more exposure to risks, a situation that the offshore banks not accustomed to Nigeria’s retail banking culture is especially more cautious of.

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