Assets, liabilities of discount houses decline by 20.4% to N135.2bn

Total assets and liabilities of discount houses stood at N135.2 billion at the end of February 2015, showing a decline f 20.4 percent below the level at end-January 2015, Central Bank of Nigeria (CBN) has said.

 

The development was accounted for, largely, by the 80.2 percent and 10.9 percent fall in claims on banks and Federal Government, respectively.

Correspondingly, the decrease in total liabilities was attributed to the 76.1 percent and 14.0 percent fall in borrowings and money at- call.

The CBN’s Economic Report for the month of February 2015 revealed that discount houses’ investment in Federal Government securities stood at N51.98 billion and accounted for 52.7 percent of their total deposit liabilities.

Thus, investment in Federal Government securities was 7.3 percentage points below the prescribed minimum level of 60.0 percent. At that level, discount houses’ investment on NTBs fell by 0.8 percent below the level at the end of the preceding month.

Total borrowing and amount owed by the discount houses was N29.37 billion, while their capital and reserves amounted to N29.6 billion.

This resulted in a gearing ratio of 1.8:1, compared with the stipulated maximum target of 50:1 for fiscal 2015.

Available data from the report indicated that total assets and liabilities of the commercial banks amounted to N28.486 trillion, showing an increase of 2.9 percent over the level at the end of January 2015.

According to the CBN, funds were sourced mainly from unclassified liabilities; central government deposits and claims on the central bank.