There are indications that four Deposit Money Banks (DMBs) out of 12 that were analysed by the Nigerian Tribune have crossed the new Loan to Deposit Ratio (LDR) of 65 per cent as directed by the Central Bank of Nigeria (CBN).
The banks analysed based on third quarter (Q3) 2019 financial results are: Access Bank at 69.4 per cent, Fidelity Bank at 68.4 per cent, and Sterling Bank at 74.4 per cent.
Nine other lenders that have crawled closer to scaling the hurdle according to analysis of their financial results are: Guaranty Trust Bank at 57.64 per cent, Ecobank Transnational Incorporated at 60.2 per cent, Zenith Bank at 55.8 per cent and Stanbic IBTC which loan to deposit ratio stood at 62.9 per cent.
Other lenders in this category include: First Bank of Nigeria Holdings (FBNH) at 52.8 per cent, United Bank for Africa at 57.4 per cent, Union Bank of Nigeria at 59.23 per cent, Unity Bank at 34.95 per cent and Wema Bank at 62.82 per cent as obtained in the third quarter financials of various banks released so far.
The CBN raised the Loan to Deposit Ratio of banks to 65 per cent, after the September 30 deadline given to the lenders to meet its 60 per cent directive.
The apex bank gave its regulated entities December 31, 2019 deadline to meet its new requirement.
Following from this, Nigerian Tribune analysis further showed that 10 Nigerian Banks have increased their loan disbursements to customers by N1.84 trillion in the first three quarters of 2019.
According to the report, the gross loans by the 10 banks rose to N13.55 trillion in September 2019 compared to N11.70 trillion in December 2018. This means the banks increased their loans’ disbursement by 15.8 per cent (N1.84 trillion).
The lenders under review include: Access Bank, First Bank, Zenith, UBA, GT Bank, Stanbic IBTC, Wema Bank, Unity, Sterling and Fidelity Bank.
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A look into the financials showed that Access Bank recorded the highest additional loan disbursement of N801.7 billion within the period under review (December 2018 to September 2019). The bank’s loans and advances rose from N2.13 trillion in December 2018 to N2.93 trillion in September 2019. This represents a whopping 37 per cent increase in loans.
UBA ranks second with an additional loan disbursement of N254 billion, representing a 14 per cent rise between December 2018 and September 2019.
Fidelity Bank ranks third with an additional loan disbursement of N224.2 billion within the period.
Zenith Bank’s additional loan disbursement stood at N219.9 billion, thereby increasing its total loans and advances from N1.82 trillion in December 2018 to N2.04 trillion in September 2019.
GT Bank also increased its loans by N115.9 billion, representing a 9per cent increase in nine months.
Stanbic IBTC loan disbursement also rose by N101 billion, Unity Banks (N45.1 billion), First Bank (N37.9 billion), Wema (N34.7 billion) and Sterling (N14.07 billion) the analysis showed.
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