Nigeria's central bank grants N899 billion intervention funds in 2015

29 Apr 2016
Financial Nigeria


The intervention funds are commitments made in respect of Commercial Agricultural Credit Guarantee Scheme, Power and Aviation Fund, SME/Manufacturing Sector Intervention Fund and other intervention activities.

Governor, Central Bank of Nigeria, Godwin Emefiele

The Central Bank of Nigeria (CBN) has said its total intervention funds in 2015 rose 35 percent year-on-year (YoY) to N899 billion compared with N668 billion granted in 2014.  

The apex bank's intervention funds represent commitments made in respect of Commercial Agricultural Credit Guarantee Scheme, Small and Medium Enterprises Credit Guarantee Scheme, Power and Aviation Fund, SME/Manufacturing Sector Intervention Fund and other intervention activities of the CBN.

The report is contained in the central bank's consolidated and separate financial statements for the year ended December 31, 2015, published on Wednesday, in which the CBN reported 64 percent YoY increase in total operating income in 2015. The Bank's operating income increased from N467 billion in 2014 to N731 billion last year.

The boost in CBN's operating income in 2015 was also attributed to foreign exchange revaluation gains of N305 billion. Forex revaluation gains represent forex differences arising from the naira conversion of debt instruments denominated in foreign currencies. According to the CBN’s latest results, interest and similar income from federal government securities, Asset Management Corporation of Nigeria (AMCON) notes as well as from loans and receivables grew by 30.5 percent to N567 billion in 2015.

Fees and commission income, however, declined 53 percent YoY from 142.7 billion in 2014 to 67.6 billion last year. Fees  and  commissions  represent  income  from  processing  currency,  Bureau  de  change  application  and  registration,  commission  on  fund transfers  and  other  banks  and  financial  institutions  application  and  licensing  fees.

The CBN reported a net income of N123.1 billion, a 266 percent YoY increase from the previous year's net income of N33.6 billion.

A report of the Committee of Governors' of the apex stated that the consolidated  separate  financial  statements  of  the  CBN  have  been  prepared  in  accordance  with  International  Financial  Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

There was a steep rise in government deposits at the CBN resulting from the implementation of the Treasury Single Account. Current accounts maintained by government parastatal and ministries with the CBN rose 151 percent year-on-year from N1.4 trillion in 2014 to N3.6 trillion in 2015.

However, reserve deposits of Nigerian banks fell 31 percent to N2.5 trillion in 2015 as against N3.6 trillion recorded in the previous year. The drop in banks' reserve deposits reflects the decision of the CBN to reduce its cash reserve ratio from 25 percent to 20 percent in November 2015. This move reportedly injected about N1 trillion into the banking system.

In the year under review, the CBN said its total assets rose 13 percent to N15.5 trillion compared with N13.7 trillion in the previous year.

The CBN incurred an impairment charge on financial investments of N1.5 billion, an 18.4 percent drop from N1.8 billion recorded in 2014.

The CBN said its external reserves, which has been hit hard by low oil prices, fell 10 percent to N5.3 trillion in 2015 compared with N5.8 trillion in the previous year. The CBN’s reserves are held in gold, convertible currencies, other foreign securities, and the International Monetary Fund reserve tranche. (The reserves stood at $29.07 billion as at December 31st, 2015).

In line with the provisions of the Fiscal Responsibility Act 2011, 80 percent of the net income of the CBN will be credited to the federal government while the balance will be credited to retained earnings of the Bank.

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