By Peter Egwuatu
CENTRAL Bank of Nigeria, CBN, yesterday, raised N215.9 billion from an auction of the Nigerian Treasury Bills, which was N75 billion more than the N140.9 billion it originally planned to raise. The total subscription at the auction stood at N559 billion, which was about, N418.1 billion or 296.7 percent in excess.
Financial instruments’ traders attributed the upsurge in the subscription to the interest shown by foreign investors, with the one-year paper accounting for most of the debt. Investors bid as much as 18.9 per cent for the one-year debt and as low as 13.15 percent for the three months note.
The CBN raised N22.78 billion in three month tenored bills at 13.15 percent, N24.74 billion naira in six month bills at 16.8 percent and N168.36 billion naira in one-year bills at 17 percent.
The CBN issues treasury bills twice a month to help the government fund its budget deficit, support commercial lenders in managing liquidity and curb inflation.
Meanwhile, four banks operating in the country are operating with too many non-performing loans on their books and with liquidity ratios below the minimum requirement, two members of the CBN monetary policy committee said in statements posted on the bank’s website.
The members did not name the banks but said the four banks together were equivalent to at least one systemically important bank, one of the members, Doyin Salami, said in his statement.
Financial sector stress tests showed capital adequacy ratios for the industry in Nigeria worsened to 11.51 per cent in June, from 12.81 percent in April, as against a regulatory minimum of 15 percent for lenders with international licenses.
“The financial performance indicators showed that when the four outlier banks were removed, capital adequacy, (NPLs) Non-Performing Loan ratio as well as liquidity ratio are all above the prudential requirement,” another member, Balami Dahiru Hassan, said.
NPLs stood at 15.07 percent in June compared with five percent regulatory limit. Salami said the ratio stood at 8.17 percent when excluding the four lenders in question.