The Central Bank of Nigeria (CBN) reported that the banking sector’s Capital Adequacy Ratio (CAR) rose to 14.01% in the third quarter of 2024, up from 12.52% in the second quarter, reflecting improved resilience and stability. Despite economic headwinds, this increase was attributed to higher total qualifying capital and reduced risk-weighted assets. While the CAR exceeded the 10% benchmark for banks with national or regional authorization, it remained below the 15% threshold for international banks.
However, the report highlighted a slight deterioration in asset quality, with the non-performing loans (NPL) ratio increasing to 4.58% from 3.90% in Q2, though still below the prudential benchmark of 5%. The industry Liquidity Ratio (LR) improved to 46.06%, well above the regulatory minimum of 30%, signaling sufficient liquidity for meeting obligations.
Meanwhile, subscriptions to Nigerian Treasury Bills (NTBs) and Federal Government Bonds declined compared to Q2 2024. Lower offerings and higher stop rates marked the quarter, as inflation expectations reduced demand for long-term securities. Despite these challenges, the banking sector showed robust financial health, with positive liquidity and capital indicators.
