Total assets/liabilities of the discount houses declined to N133.76 billion at the end of December last year.
This showed a drop of 14.0 and 61.2 per cent below the levels at the end of the preceding quarter and the corresponding quarter of 2012, respectively.
The fall in assets relative to the preceding quarter was accounted for by the decrease in claims on federal government and banks which more than offset the effect of the rise in other assets. Correspondingly, the fall in total liabilities was attributed to the decline in capital and reserves, money-at-call and other amount owed, which exceeded the increase in other liabilities. Discount houses’ investment in federal government securities of less than 91-day maturity declined by 4.7 per cent to N31.4 billion and representing 30.6 per cent of their total deposit liabilities.
At this level, the CBN said that the discount houses’ investment was 29.4 percentage points below the prescribed minimum level of 60.0 per cent for fiscal 2013.
Total borrowing by the discount houses was N40.0 billion, while their capital and reserves stood at N18.0 billion. This resulted in a gearing ratio of 2.2:1, compared with the stipulated maximum of 50:1 for fiscal 2013.
The available data from CBN indicated that the total assets and liabilities of the Deposit Money Banks (DMBs) stood at N24.334 trillion at the end of the fourth quarter of 2013, representing an increase of 4.4 per cent over the level at the end of the preceding quarter.
The funds, which were sourced, largely, from increased mobilisation of demand deposit and federal government deposit, were used for accretion to reserves and purchase government securities.
The CBN report said that at N12.224 trillion, banks’ credit to the domestic economy, rose by 8.6 per cent above the level in the preceding quarter. The development was attributed, largely, to the 346.9 per cent increase in claims on the federal government.
However, the Central Bank’s credit to the banks fell by 1.6 per cent to N229.8 billion at the end of the review quarter, reflecting the decline in overdrafts to banks, while total specified liquid assets of the DMBs stood at N6.614 trillion, representing 39.5 per cent of their total current liabilities.
At that level it said, the liquidity ratio, rose by 1.8 percentage points above the level in the preceding quarter, and was 9.5 percentage points above the stipulated minimum ratio of 30.0 per cent. The loans-to-deposit ratio, at 36.3 per cent, was 2.9 percentage points above the level at the end of the preceding quarter, but was 43.7 percentage points below the prescribed maximum ratio of 80.0 per cent.2.5 Discount Houses’ Activities