Banks Continue to Maintain Ratio at Above 30% Despite Liquidity Crunch.

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Deposit Money Banks (DMBs) operating in Nigeria reported varied Liquidity Ratio (LR) over the statutory level in the 2022 financial year, despite the Central Bank of Nigeria’s (CBN) tightening of monetary policy.

According to an analysis of banks’ 2022 financial reports, Stanbic IBTC Holdings had the greatest liquidity ratio in the banking industry, followed by Zenith Bank Plc and United Bank for Africa Plc, while UBA and Guaranty Trust Holding Company (GTCO) Plc topped in the CAR. In particular, Stanbic IBTC Holdings recorded 85.04 percent in 2022, down from the 105.40 percent reported in the 2021 fiscal year, but still more than CBN requital of 30%.

When Zenith Bank (Group) concluded 2022, its banking division had a liquidity ratio of 75%, up from 71.5% in 2021. In addition, Zenith bank reported a drop in its CAR to 19.8 per cent in 2022 from 21 per cent reported in 2021. Zenith bank in a presentation hinted that the reported capital adequacy ratio and liquidity ratios –well above regulatory requirements of 30 per cent for Liquidity and 15per cent for CAR.

“Capital base –predominantly made up of Tier-1 (core capital) which consists of share capital and reserves,” the bank added. According to Access Holdings, the official Cash Reserve Ratio has steadily grown over the past five years, rising to 32.5 per cent in Q4 2022 (2018: 22.5 per cent). Stakeholders have expressed that intensive regulation of Nigerian banks has helped them to remain sound.


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