FINANCIAL STABILITY REPORT – JUNE 2024


FINANCIAL
STABILITY
REPORT

JUNE 2024

FINANCIAL STABILITY REPORT – JUNE 2024
i
CONTENTS

Securities and Exchange Commission Regulatory and Supervisory Activities .... 30


FINANCIAL STABILITY REPORT – JUNE 2024


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Anti-Money Laundering, Combating the Financing of Terrorism and Countering
3.7.4.
3.7.5.
Guidelines on the Operation of Bank Accounts for Virtual Asset Service


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11. APPENDIX 2: PERFORMANCE OF SELECTED CURRENCIES AGAINST THE US
13. APPENDIX 4: REAL SECTOR INITIATIVES: SUMMARY OF DISBURSEMENTS AND
14. APPENDIX 5: SELECTED FINANCIAL SOUNDNESS INDICATORS OF THE


FINANCIAL STABILITY REPORT – JUNE 2024

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LIST OF FIGURES
FIGURE 2.1 HERFINDAHL-HIRSCHMAN INDICES AND CONCENTRATION RATIOS OF THE BANKING
FIGURE 3.5 EXPOSURE OF BANKING SYSTEM TO OIL & GAS, MANUFACTURING AND SERVICES ... 41


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LIST OF TABLES
TABLE 2.6: NIGERIAN EXCHANGE LIMITED INDICES, ASI AND EQUITY MARKET CAPITALISATION . 21


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TABLE 2.26: WOMEN AND WOMEN-OWNED ENTERPRISES TRANSACTIONS ON THE NATIONAL
TABLE 3.7: MATURITY STRUCTURE OF MFBS LOANS AND ADVANCES AND DEPOSIT LIABILITIES .. 55


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TABLE 5.8: REALISATION FROM DISPOSAL AND RENTS OF FIXED ASSETS OF BANKS IN-LIQUIDATION

LIST OF BOXES


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LIST OF ACRONYMS
Acronym
Description
AACB
Association of African Central Banks
ACGS
Agricultural Credit Guarantee Scheme
AEs
Advanced Economies
AMCON
Asset Management Corporation of Nigeria
AML/CFT/CPF
Anti-Money Laundering, Combating the Financing of Terrorism and
Countering Proliferation Financing
ASI
All Share Index
AuM
Assets under Management
BCBS
Basel Committee on Banking Supervision
BDCs
Bureaux de Change
BOA
Bank of Agriculture
BOI
Bank of Industry
BRICS
Brazil, Russia, India, China, and South Africa
BVN
Bank Verification Number
CABS
Community of African Banking Supervisors
CACS
Commercial Agriculture Credit Scheme
CAR
Capital Adequacy Ratio
CBDC
Central Bank Digital Currency
CBN
Central Bank of Nigeria
CCP
Central Counterparties
CIBN
Chartered Institute of Bankers of Nigeria
CIC
Currency in Circulation
CIS
Collective Investment Scheme
CMNBs
Commercial, Merchant and Non-interest Banks
CMOs
Capital Market Operators
COB
Currency Outside Banks
CODC
Currency Outside Depository Corporations
CPI
Consumer Price Index
CPS
Contributory Pension Scheme
CRMS
Credit Risk Management System


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Acronym
Description
CRR
Cash Reserve Requirement
CSE
Crisis Simulation Exercise
CSWAMZ
College of Supervisors of the West African Monetary Zone
DAX
Deutscher Aktienindex (German stock index of 30 major German
companies)
DCs
Depository Corporations
DFIs
Development Finance Institutions
DIF
Deposit Insurance Fund
D-SIBs
Domestic Systemically Important Banks
DVP
Delivery Versus Payment
EBAs
Eligible Bank Assets
ECB
European Central Bank
EGX CASE 30
Egypt Stock Exchange (Cairo and Alexandria Stock Exchange) 30
Stock Index
EMDEs
Emerging Markets and Developing Economies
ESG
Environmental, Social & Governance
ETF
Exchange Traded Funds
EVD
Ebola Virus Disease
FAO
Food and Agriculture Organisation
FATF
Financial Action Task Force
FCs
Finance Companies
FGN
Federal Government of Nigeria
FMBN
Federal Mortgage Bank of Nigeria
FPI
Foreign Portfolio Investment
FRACE
Financial Regulation Advisory Council of Experts
FSIs
Financial Soundness Indicators
FSR
Financial Stability Report
FSRCC
Financial Services Regulation Co-ordinating Committee
GCMX
Gezawa Commodity Market and Exchange Limited
GDP
Gross Domestic Product


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Acronym
Description
GIABA
Inter-Governmental Action Group Against Money Laundering in
West Africa
GSE
Ghanaian Stock Exchange
GSI
Global Standing Instruction
HHI
Herfindahl-Hirschman Index
I&E
Investor & Exporter
ICAAP
Internal Capital Adequacy Assessment Process
ICE
Intercontinental Exchange
ICFA
Implied Cash Flow Analysis
IFOs
Illegal Fund Operators
IFRS
International Financial Reporting Standards
IMF
International Monetary Fund
IRRBB
Interest Rate Risk in the Banking Book
KOB
Knowledge of Business
KYC
Know Your Customer
LCFE
Lagos Commodities and Futures Exchange
LDR
Loan-Deposit Ratio
LR
Liquidity Ratio
M1
Narrow Money Supply
M2
Broad Money Supply
M3
M2 plus CBN Bills held by the money holding sectors
MC
Market Capitalization
MENA
Middle East and North African Countries
MFBs
Microfinance Banks
MHSs
Money Holding Sectors
MICEX
Moscow Interbank Currency Exchange
MMOs
Mobile Money Operators
MoUs
Memoranda of Understanding
MPR
Monetary Policy Rate
MSMEs
Micro, Small and Medium Enterprises


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Acronym
Description
MTDS
Medium-Term Debt Strategy
NAICOM
National Insurance Commission
NAPGEP
National Peer Group Educator Programme
NASD
National Association of Securities Dealers
NAV
Net Asset Value
NBS
National Bureau of Statistics
NCR
National Collateral Registry
NDA
Net Domestic Assets
NDIC
Nigeria Deposit Insurance Corporation
NDPR
Nigerian Data Protection Regulation
NEXIM
Nigerian Export-Import Bank
NFA
Net Foreign Assets
NFIU
Nigerian Financial Intelligence Unit
NGX
Nigerian Exchange Limited
NIBSS
Nigeria Inter-Bank Settlement System
NICPAS
Nigeria Cheque Printers’ Accreditation Scheme
NIDIF
Non-Interest Deposit Insurance Fund
NIMC
National Identity Management Commission
NIN
National Identity Number
NMRC
Nigeria Mortgage Re-finance Company Plc
NPLs
Non-Performing Loans
NSBPs
Nigeria Sustainable Banking Principles
NSE 20
Nairobi Stock Exchange 20-Share Index
NSE ASI
Nigerian Stock Exchange All-Share Index
NTBs
Nigerian Treasury Bills
NYSC
National Youth Service Corps
OAGF
Office of the Accountant General of the Federation
OBB
Open Buy Back
ODCs
Other Depository Corporations
OFIs
Other Financial Institutions


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Acronym
Description
OPEC
Organisation of Petroleum Exporting Countries
OPEC+
OPEC Members plus 10 other oil-producing countries
ORB
OPEC Reference Basket
OTC
Over-the-Counter
PAIF
Power and Aviation Infrastructure Fund
PAR
Portfolio-At-Risk
PCX
Prime Commodity Exchange
PENCOM
National Pension Commission of Nigeria
PFAs
Pension Fund Administrators
PFCs
Pension Fund Custodians
PMBs
Primary Mortgage Banks
PoS
Point of Sale
PSBs
Payment Service Banks
PSDIF
Payment Service Deposit Insurance Fund
PSPs
Payments System Providers
PSV 2025
Payments System Vision 2025
QR
Quick Response
RAS
Risk Assessment Summary
RBS
Risk-Based Supervision
RCAR
Root Cause Analysis Report
RCMMP
Revised Capital Market Master Plan
ROA
Return on Assets
ROE
Return on Equity
RRPs
Recovery and Resolution Plans
RTGS
Real-Time Gross Settlement
S&P/FMDQ
Standards and Poor’s Financial Market Dealers Quotations
S&P/TSX
Standards and Poor’s Composite Index of the Toronto Stock Exchange
SANEF
Shared Agent Network Expansion Facilities
SCV
Single Customer View


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Acronym
Description
SDRs
Special Drawing Rights
SEC
Securities and Exchange Commission
SIF
Securities Issuers Forum
SMEs
Small and Medium Enterprises
SRE
Supervisory Review and Evaluation
SSA
Sub-Saharan Africa
TIN
Tax Identification Number
WAMZ
West African Monetary Zone
WEO
World Economic Outlook
WTI
West Texas Intermediate


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GOVERNOR’S STATEMENT
The June 2024 edition of the Financial Stability Report presents an analysis of developments in the Nigerian financial landscape in the face of continued global and domestic
economic headwinds during the review period. The major headwinds that shaped global
output growth and financial stability included persistent geopolitical tensions, supply disruptions and restrictive monetary policies aimed at curbing inflation. Consequently, global
growth moderated marginally to 3.2 per cent from 3.3 per cent at end-December 2023,
while near-term global financial stability conditions softened on the back of expected monetary easing.
Growth forecast for Advanced Economies (AEs) remained stable while growth in Emerging
Markets and Developing Economies (EMDEs) was expected to decline marginally. In SubSaharan Africa (SSA), growth was estimated at 3.7 per cent in 2024 on account of easing
global financial conditions and gradual increase in capital inflows. Global inflation moderated during the period, owing largely to the sustained tight policy stance of most monetary
authorities.
In Nigeria, real GDP sustained its growth trajectory, recording 3.08 per cent in the first half
of 2024, compared with 3.00 per cent in the second half of 2023, driven mainly by the
services sector. The major headwinds that confronted the economy included heightened
inflationary pressures, low oil output and legacy structural bottlenecks. The Bank maintained its contractionary monetary policy stance to rein-in inflationary pressures, which also
attracted substantial capital inflows, thereby boosting the external reserves.
Despite the challenges in the macroeconomic environment, the financial services sector
demonstrated resilience with the sustained implementation of appropriate regulatory and
supervisory measures and initiatives. Thus, the key Financial Soundness Indicators (FSIs)
remained strong across the banking, capital market, pension and insurance sub-sectors.
These have strengthened the capacity of the sector to support the ongoing economic reforms towards engendering sustainable growth.
The outlook for global growth remained cautiously optimistic as inflationary pressures decelerate across various regions while near-term financial stability risks recede. The domestic economy is also expected to sustain its positive trajectory as inflation trends downward,
supported by the expected gains of economic reforms, especially in the petroleum industry
and the foreign exchange market.
The Bank, in collaboration with other regulators in the financial services sector will remain
proactive in working with the fiscal authority to promote a stable, sound and safe financial
system in Nigeria.

Olayemi Michael Cardoso
Governor, Central Bank of Nigeria


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FOREWORD
Global financial conditions eased relatively during the first half of 2024 as most economies
experienced disinflation, supported by sustained implementation of tight monetary policy in
many advanced and emerging markets. Consequently, the performance of global stocks
improved considerably, with a significant narrowing of the spread between corporate and
sovereign borrowing. Furthermore, the volatility of most asset classes declined, reflecting
increased optimism that many advanced central banks were likely to cut rates. Owing to
the expected monetary policy easing, the likelihood of capital outflows across EMDEs in
the medium term largely waned. Despite this optimism, the global financial system, especially in the advanced economies and emerging markets, remained vulnerable to growing
public and private debts which could exacerbate shocks and slow growth.

In Nigeria, the financial system remained resilient despite significant domestic and global
headwinds, including rising inflation, foreign exchange demand pressures, high fiscal deficits and the uncertainty in the global environment. The key Financial Soundness Indicators
remained strong, indicating the banking industry’s capacity to support sustainable growth
and macroeconomic stability as evidenced by the results of stress tests.

The June 2024 edition of the FSR is structured into nine sections. Section one considers
developments in the global and domestic economies, while section two outlines developments in the financial system. Sections three and four highlight regulatory and supervisory
issues as well as developments in the payments system. Sections five, six and seven focus
on major activities in the deposit insurance schemes, pension and insurance subsectors.
Sections eight and nine discuss the key risks and the outlook for financial stability, respectively.

The Bank will sustain its collaboration with other financial sector regulators to review emerging developments and respond with appropriate policy measures and initiatives towards
promoting financial system stability.


Philip Ikeazor
Deputy Governor, Financial System Stability


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EXECUTIVE SUMMARY
Global economic activities declined marginally in the first half of 2024, owing largely to the
dampening effects of the tight monetary policy of major central banks towards restoring
price stability. Although, some large economies recorded slight growth, supply-side disruptions and lingering trade tensions as well as lower output from China, constrained global
economic growth.
Growth forecast for Advanced Economies (AEs) remained stable at 1.7 per cent in 2024 as
in 2023, while growth in Emerging Markets and Developing Economies (EMDEs) was expected to decline marginally to 4.3 per cent in 2024 from 4.4 per cent in 2023. Growth in
Sub-Saharan Africa (SSA) was estimated at 3.7 per cent in 2024 from 3.4 per cent in 2023
on account of easing global financial conditions and gradual increase in capital inflows.
Overall, global growth is expected to decline to 3.2 per cent at end-December 2024 from
3.3 per cent at end-December 2023.
Global inflation remained on a disinflationary path during the review period. The deceleration is supported by the sustained tight policy stance by most monetary authorities, decline
in some commodity prices, and slowdown in wage growth. Consequently, global inflation is
expected to moderate to 5.9 per cent in 2024 from 6.7 per cent in 2023. Inflation in AEs is
estimated to fall to 2.7 per cent in 2024, from 4.6 per cent in 2023. Similarly, inflation in the
EMDEs is expected to decline marginally to 8.2 per cent in 2024, from 8.3 per cent in 2023.
However, key risks such as persistent inflation and supply chain disruptions continue to
undermine central banks' efforts at achieving price stability, particularly in EMDEs.
On the domestic front, the Nigerian economy grew by 3.08 per cent in real terms during the
first half of 2024, compared with 3.00 per cent in the second half of 2023, driven mainly by
the non-oil sector which contributed 2.64 percentage points. The performance of the oil
sector improved, contributing 0.44 percentage point to the GDP, compared with 0.24 percentage point in the preceding half-year, mainly on account of enhanced surveillance at oil
production terminals. However, inflationary pressures remained high, with headline inflation
rising to 34.19 per cent by mid-2024, driven mainly by the rising energy costs as well as
exchange rate depreciation pass-through. Consequently, the Bank sustained its contractionary monetary policy stance, raising the Monetary Policy Rate to 26.25 per cent at endJune 2024 from 18.75 per cent at end-December 2023.
The exchange rate in the Nigerian Foreign Exchange Market (NFEM) depreciated during
the review period, reflecting persistent demand pressure as the market sought to achieve
price discovery following the unification of exchange rates. External reserves rose to $34.76
billion by mid-2024, owing to increased net inflows largely attributed to improved investor
confidence in the ongoing economic reforms.
The Nigerian financial system remained resilient, with all the key sub-sectors recording
positive performances. The Bank sustained its regulatory and supervisory oversight, including onsite examinations, off-site surveillance and AML/CFT/CPF assessments, to enhance
the safety and soundness of the banking system. These measures resulted in improved
financial soundness indicators, which remained largely within the prudential benchmarks.


FINANCIAL STABILITY REPORT – JUNE 2024


The banking industry demonstrated adequate capacity to absorb solvency and liquidity
shocks as evidenced by the results of the various stress tests.
During the review period, the Bank announced new minimum capital requirements for Commercial, Merchant and Non-Interest Banks to be achieved within a two-year time frame,
ending March 31, 2026. The policy is aimed at ensuring the emergence of a stronger and
more resilient banking system and supporting the achievement of a USD 1 trillion economy
by the year 2030.
As part of efforts to strengthen the confidence of the banking public, the Nigeria Deposit
Insurance Corporation (NDIC) raised the guaranteed payments to depositors of insured
financial institutions to a maximum of ₦5,000,000, from ₦500,000.00 for CMNBs and
MMOs. In addition, the maximum coverage limit for PMBs, PSBs and MFBs was raised to
₦2,000,000 per depositor.
During the review period, the performance of the pension sub-sector improved as evidenced by increases in total membership by 1.96 per cent to 10.4 million and asset-to-GDP
ratio to 8.55 per cent from 7.98 per cent. Similarly, the insurance sub-sector recorded considerable growth as its total assets increased by 27.60 per cent to ₦3,687.90 billion. The
industry CAR remained above the regulatory threshold of 40 per cent while the ratio of
assets to GDP improved by 0.38 percentage point to 1.54 per cent.
The Bank continued to implement policies and initiatives to improve the safety and efficiency of the Nigerian payments system. During the review period, Bank Verification Number (BVN) enrolment increased by 3.72 per cent to 62,384,398 while active accounts increased by 4.73 per cent to 225,525,483. Furthermore, final licences were granted to 18
Payment Service Providers (PSPs), bringing the total to 226.
The Bank continued to scale down its direct interventions in the economy and intensified
the debt recovery drive as reflected in increased loan repayments.
The key risks to financial system stability during the review period included elevated inflation, high debt levels and the rising cost of debt service, low government revenue, exchange
rate pressures, cyber risk, as well as increased operating costs.
Overall, the outlook for the financial system stability remained positive, as the Bank and
other relevant regulatory agencies in collaboration with the fiscal authority continue to implement risk mitigating measures to ensure a robust and resilient financial system in Nigeria.
FINANCIAL STABILITY REPORT – JUNE 2024
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1. ECONOMIC AND FINANCIAL DEVELOPMENTS
1.1 Output Growth
1.1.1 Global Output Growth
Global growth moderated marginally in the first half of 2024, due largely to the dampening
effects of high policy rates maintained by major central banks intended to restore price
stability. Although some large economies recorded some growth; supply-side disruptions,
heightened trade tensions in major economies, and lower output growth in China constrained global economic activity. Thus, global growth is projected to decline to 3.2 per cent
at end-December 2024 from 3.3 per cent at end-December 2023 (IMF, WEO July 2024).
The growth forecast for Advanced Economies (AEs) remained stable at 1.7 per cent in
2024, as was in 2023, while growth in Emerging Markets and Developing Economies
(EMDEs) is expected to decline marginally to 4.3 per cent in 2024, from 4.4 per cent in
2023. Growth in Sub-Saharan Africa (SSA) is estimated at 3.7 per cent in 2024, from 3.4
per cent in 2023, on account of easing global financial conditions and gradual increase in
capital inflows.
Figure 1.1 Global Output Growth

Source: IMF World Economic Outlook Update, July 2024
Table 1.1: Global Output Growth

End - Jun

End-Dec

End-June

World

Advanced Economies

United States

Euro Area

Japan
1.1
-4.5
2.2

1.4
1.9
0.7
United Kingdom

Canada

Emerging Market & Developing Economies

China
6.2
2.3
8.4

5.2
5.2
5.0
Middle East & Central Asia

Sub-Saharan Africa
3.5
-1.7
4.7

3.5
3.4
3.8
Nigeria


Source: IMF World Economic Outlook Update, July 2024
-15
-10
-5

End-June 2024


FINANCIAL STABILITY REPORT – JUNE 2024

1.1.2 Domestic Output Growth
The domestic economy grew by 3.08 per cent in real terms in the first half of 2024, compared with 3.00 per cent in the second half of 2023. The non-oil sector remained the major
driver of growth, contributing 2.64 percentage points, owing largely to the performance of
the services sector. The oil sector contributed 0.44 percentage point compared with 0.24
percentage point in the preceding half-year. The improvement reflected increased crude oil
output following enhanced surveillance at oil production terminals.

Figure 1.2 Gross Domestic Product (Growth %)

Source: National Bureau of Statistics

The non-oil sector grew by 2.80 per cent compared with 2.91 per cent in the preceding halfyear. Similarly, the oil sector expanded by 7.92 per cent compared with 5.63 per cent in the
preceding half-year.
Table 1.2: Crude Oil Production
H2 2023
Daily Average

H1 2024
Daily Average
July
1,089,089

January
1,426,574
August
1,181,133

February
1,322,208
September
1,346,562

March
1,230,518
October
1,350,573

April
1,281,478
November
1,250,299

May
1,251,494
December
1,335,098

June
1,276,159
H2 2023 (Average)
1,258,792

H1 2024 (Average)
1,298,072

An analysis of the relative sectoral contributions to real GDP growth indicated that the services sector maintained the lead, contributing 2.34 percentage points. This outcome was
higher than the 2.16 percentage points recorded in the preceding half-year. The improved
performance of the services sector was driven, mainly, by significant increases in net interest income and foreign exchange revaluation gains of banks as well as the performance of
the information and communication technology (ICT) sub-sector. The growth in ICT was
driven largely by the rise in foreign direct investments during the review period.

H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
H2 2023
H1 2024
PER CENT


FINANCIAL STABILITY REPORT – JUNE 2024

The industrial sector contributed 0.56 percentage point, compared with 0.39 percentage
point in the preceding half-year. In contrast, the agricultural sector contributed 0.18 percentage point to real GDP growth, lower than the 0.47 percentage point achieved in the
preceding half-year. The lower contribution of the agricultural sector was attributed to seasonal factors and the lingering security challenges in the major farming belt of the country
(Tables 1.2 & 1.3).

Table 1.3: Sectoral Contributions to Real GDP Growth
Source: National Bureau of Statistics

1.2 Inflation
1.2.1 Global Inflation
Global inflation remained on a disinflationary path during the review period, owing to the
sustained tight policy stance by most monetary authorities, decline in some commodity
prices, and slow-down in wage growth. Consequently, global inflation is expected to moderate to 5.90 per cent in 2024, from 6.70 per cent in 2023. Inflation in AEs is estimated to
fall to 2.7 per cent in 2024, from 4.6 per cent in 2023. In the US, Euro Area, and Japan, it
is expected to decline to 3.1, 2.4, and 2.4 per cent, respectively.
Inflation in the EMDEs is expected to decline marginally to 8.2 per cent in 2024, from 8.3
per cent in 2023. Similarly, inflation is projected to moderate in the Middle East and North
Africa (MENA) and SSA to 15.4 per cent and 15.3 per cent in 2024, from 16.0 and 16.2 per
cent in 2023, respectively.


Sector
H1 2022
H2 2022
H1 2023
H2 2023
H1 2024
Agriculture

Of which: Crop Production

Industry

Of which: Oil

Manufacturing

Services

Of which: Finance & Insurance

ICT

Real GDP Growth


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 1.3 Global Inflation

Source: WEO Update, July 2024

Table 1.4: Global Inflation

World Consumer Prices*

Advanced Economies

United States

Euro Area

Japan

United Kingdom

Emerging Market and Developing
Economies

Middle East and North Africa

Sub-Saharan Africa


Source: WEO Update July 2024; *Excludes Venezuela

1.2.2 Domestic Inflation
Inflation remained elevated in the first half of 2024, as all three measures (food, core and
headline) increased. The increases reflected the rising energy costs, rising food prices,
exchange rate depreciation pass-through and high inflation expectations. Headline inflation
(year-on-year) rose to 34.19 per cent, from 28.92 per cent at end-December 2023. The
major driver remained food inflation, which increased to 40.87 per cent, from 33.93 per cent
in the preceding period.

-2

FINANCIAL STABILITY REPORT – JUNE 2024

Figure 1.4 Inflationary Trends

Source: National Bureau of Statistics

Food inflation (year-on-year) rose by 6.94 percentage points, driven largely by higher cost
of inputs, transport and logistics. Similarly, core inflation increased by 4.34 percentage
points to 27.40 per cent, owing mainly to higher manufacturing input costs.

1.3 Oil Prices
Oil prices rose in the first half of 2024, due to instability in the Middle East and the extension
of production cuts by OPEC+.
Figure 1.5: Oil Prices (US$ per barrel)

Source: OPEC Monthly Oil Market Report
Note: Brent is North Sea Dated


Table 1.5: Oil Prices (US$ Per Barrel)
Selected Crudes

End-Jun

End-Dec

End-Jun

West Texas Intermediate (WTI)

Brent

OPEC Basket

Bonny Light

Source: OPEC and Reuters


2021 H2
2022 H1
2022 H2
2023 H1
2023 H2
2024 H1
Per cent (%)
Headline (Y-on-Y)
Core (Y-on-Y)
Food (Y-on-Y)

West Texas Intermediate (WTI)
Brent
OPEC Basket
Bonny Light
End-Dec 2020
End-Dec 2021
End-Dec 2022
End-June 2023
End-Dec 2023
End-June 2024


FINANCIAL STABILITY REPORT – JUNE 2024

1.4 Food Prices
Global food prices declined to 119.20 index points in the first half of 2024, from 121.57
index points at end-December 2023. The decrease was driven by the decline in the prices
of cereals following improved harvests in major exporting countries.
Figure 1.6: FAO Food Price Index

Source: FAO

Table 1.6: FAO Food Price Index

End-Jun 2023
End-Dec 2023
End-Jun 2024
FAO Food Price Index (FFPI)

Meat Index

Dairy Index

Cereals Index

Oils Index

Sugar Index

Source: FAO
1.5 International Stock Markets
The major global stock markets remained bullish in the first half of 2024, driven largely by
strong corporate earnings, subsiding inflationary pressures, and anticipated monetary policy normalisation (Appendix 1).
Regional performances of stock markets are reflected in the charts below.


NIK K E I 2 2 5
S H A NGH A I (S S E )
BS E S E NS E X
End-June 2023
End-Dec 2023
End-June 2024


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 1.7 Indices of African Stock Markets


Figure 1.8 Indices of North American Stock Markets


Figure 1.9 Indices of South American Stock Markets


NGX ALL - SHARE
INDE X
JSE ALL - SHARE
INDE X
NAIROBI NSE 20
S H A RE INDE X
E GX C ASE 30
GSE ALL - SHARE
INDE X
End-Dec 2021
End-Dec 2022
End-June 2023
End-Dec 2023
End-June 2024

S & P 500
S & P /T S X C OMP OS IT E
BOLS A
End-Dec 2021
End-Dec 2022
End-June 2023
End-Dec 2023
End-June 2024

BOVE S P A S T OC K
ME RVA L
C OLC A P
End-Dec 2021
End-Dec 2022
End-June 2023
End-Dec 2023
End-June 2024


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 1.11 Indices of Asian Stock Markets


1.6 Foreign Exchange Markets
The US dollar appreciated against most currencies across the globe in the first half of 2024,
driven largely by the expectation of sustained high interest rates in the United States. In
sub-Saharan Africa and some developing economies, majority of the currencies weakened
against the US dollar owing largely to limited foreign currency liquidity in the market, exchange rate reforms, lower commodity prices and weak market sentiments. In Nigeria, the
naira depreciated against the dollar, driven by high demand pressure during the review
period.
1.7 Monetary Policy Rates
During the review period, the monetary policy stance was mixed across various countries
(Appendix 3). While the Federal Reserve Bank and the Bank of England maintained policy
rates at 5.25-5.50 per cent and 5.25 per cent, respectively, the European Central Bank
(ECB) reduced rates to 3.75 per cent from 4.00 per cent. The Central Bank of Nigeria (CBN)
increased its policy rate by an aggregate of 750 basis points to 26.25 per cent in the first
half of 2024, to rein in inflation and attract foreign inflows, thereby stabilising the foreign
exchange market.

F T S E 100
C A C 40
DA X
End-Dec 2021
End-Dec 2022
End-June 2023
End-Dec 2023
End-June 2024

NIK K E I 2 2 5
S H A NGH A I (S S E )
BS E S E NS E X
End-June 2023
End-Dec 2023
End-June 2024
Figure 1.10 Indices of European Stock Markets


FINANCIAL STABILITY REPORT – JUNE 2024

1.8 Fiscal Operations of the Federal Government
Fiscal conditions weakened in the first half of 2024 as the Federal Government Retained
Revenue declined by 18.04 per cent to ₦2,599.67 billion, from ₦3,171.89 billion in the preceding half-year. The decrease was due largely to low collections from non-oil revenue
sources, particularly corporate income tax. Thus, retained revenue fell short of the prorated
budget benchmark by 67.63 per cent.
In the review period, aggregate expenditure was lower than its level in the second half of
2023 by 18.94 per cent and the prorated budget benchmark by 35.95 per cent. Consequently, overall fiscal deficit decreased by 19.42 per cent to ₦4,870.47 billion, from
₦6,044.06 billion in the preceding half-year.

Figure 1.12 Federal Government Fiscal Operations

Source: OAGF & CBN Staff Estimates

The financing gap was bridged by borrowing from domestic and external sources. Thus,
total public debt outstanding rose by 37.97 per cent to ₦134,297.67 billion at end-June
2024, from its position at end-December 2023. The rise in public debt was due largely, to
exchange rate depreciation and new borrowing to finance the deficit set out in the 2024
Appropriation Act.
A breakdown of the consolidated public debt showed that domestic debt accounted for
52.98 per cent, while external debt obligations constituted 47.02 per cent. Of the consolidated public debt stock, Federal Government of Nigeria (FGN) obligation was ₦122,834.99
billion (91.46 per cent), while State Governments accounted for the balance of ₦4,068.16
billion (8.54 per cent).

1.9 External Reserves
The gross external reserves increased by 4.64 per cent to US$34.76 billion, from US$33.22
billion at end-December 2023, representing 12.07 months of import cover. A breakdown of
the reserves indicated that the CBN, FGN and Federation holdings were US$29.75 billion

2021H1
2021H2
2022H1
2022H2
2023H1
2023H2
2024H1
₦' Billion
Retained Revenue
Aggregate Expenditure
Overall Balance


FINANCIAL STABILITY REPORT – JUNE 2024

(85.57 per cent), US$5.02 billion (14.43 per cent) and US$687,467.69. Further analysis
showed that 76.65 per cent of the reserves was held in US dollars, 12.16 per cent in Special
Drawing Rights (SDRs), 9.34 per cent in Renminbi and 1.85 per cent in other currencies.
Total inflow to the external reserves was US$16.58 billion, reflecting an increase of 45.57
per cent, compared with US$11.39 billion in the second half of 2023. The rise in total inflow
was attributed, largely, to the increases in government debt, forex swap, forex purchases
as well as interest earnings on reserves.
Total outflow increased by 21.15 per cent to US$14.72 billion, from US$12.15 billion in the
second half of 2023, driven largely by forex swap settlements. Consequently, the net inflow
in the external reserves position was attributable to positive investors’ sentiments on the
back of ongoing economic reforms.
Figure 1.13 External Reserves Position (US$ Billion)

Table 1.7: Foreign Exchange Flows through the CBN


Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24
US$' BILLION
Period

End-Jun 2023
End-Dec 2023
End-Jun 2024
Inflow (US$ billion)
12.58
11.39
16.58
Outflow (US$ billion)
15.22
12.15
14.72
Net
Flow
(US$
billion)
(2.64)
(0.76)
1.86


FINANCIAL STABILITY REPORT – JUNE 2024

2. DEVELOPMENTS IN THE FINANCIAL SYSTEM
2.1. Monetary and Credit Developments
Reserve money grew by 1.16 per cent at end-June 2024, driven by 10.82 per cent rise in
Currency-In-Circulation (CIC). Conversely, liabilities to Other Depository Corporations
(ODCs) declined by 0.51 per cent. A disaggregation of CIC revealed increases of 10.74 per
cent in the value of notes and coins to ₦4,030.35 billion and 31.44 per cent in the value of
eNaira transactions to ₦18.38 billion. The considerable growth in both notes and coins reflected increased cash demand.
Table 2.1: Components of Reserve Money (N Billion)

Dec-22
Jun-23
Dec-23
End-Jun-24
Reserve Money

Currency-In-Circulation

Of which Naira & Coins

eNaira

Liabilities to ODCs

Reserve Money (% Growth over
Preceding December)
20.59
8.15
54.28

1.16


Broad money (M3) at end-June 2024 grew by 28.02 per cent, compared with the provisional
benchmark of 15.60 per cent. The growth was driven by the 147.27 per cent and 12.10 per
cent increases in Net Foreign Assets (NFA) and Net Domestic Assets (NDA), respectively.
The growth in NFA was due largely, to the 41.34 per cent rise in claims on non-residents,
as well as exchange rate revaluation. Similarly, the growth in NDA, resulted from the 17.03
per cent rise in claims on “other sectors”.

Table 2.2: Growth Rates of Monetary Aggregates

% Change (Over preceding December)
Jun 22
Dec 22
Jun 23
Dec 23
Jun 24
Net Foreign Assets

Net Domestic Assets

Domestic Claims

Net Claims on Central Government

Claims on Other Sectors

Other Items (Net)

Currency Outside Depository Corporations

Transferable Deposits

Narrow Money Supply (M1)

Other Deposits

Monetary Liabilities (M2)

Total Monetary Liabilities (M3)


FINANCIAL STABILITY REPORT – JUNE 2024

The growth in total monetary liabilities resulted from the 32.73, 23.68 and 10.39 per cent
growth in other deposits, transferable deposits, and currency outside depository corporations, respectively. The significant growth in the total monetary liabilities reflected the rise
in foreign currency deposits of the depository corporations as a result of foreign exchange
revaluation. In terms of contribution to growth in broad money liabilities, other deposits,
transferable deposits and currency outside depository corporations accounted for 20.00,
7.95 and 0.45 percentage points, respectively.

2.1.1. Market Structure of the Banking Industry
The banking system remained competitive as depicted by the improved Herfindahl-Hirschman Indices (HHI). The HHI in terms of deposits and assets, increased to 997.60 and
1,008.86 from 929.71 and 934.78 in the preceding half-year, respectively. The concentration ratio of the six largest banks (CR6) in terms of deposits and assets rose to 70.28 per
cent and 69.99 per cent from 67.64 per cent and 66.70 per cent, respectively, at end-December 2023. Also, the shares of individual banks in total deposits and assets ranged from
0.07 per cent to 18.39 per cent and 0.08 per cent to 17.18 per cent, respectively.
Figure 2.1 Herfindahl-Hirschman Indices and Concentration Ratios of the Banking Industry Assets
and Deposits


2.1.2. Sectoral Distribution of Credit
Total credit to key sectors of the economy increased by 25.10 per cent to ₦55,713.80 billion, from ₦44,536.13 billion at end-December 2023, attributable to exchange rate revaluation.
Credit utilisation by agricultural, industrial and services sectors rose by 8.22 per cent, 30.83
per cent and 22.14 per cent, respectively, compared with the preceding half-year. Of the
total credit of ₦55,713.80 billion, the services sector accounted for ₦28,701.19 billion (51.5
per cent), followed by industry with ₦24,571.78 billion (44.1 per cent) and agriculture with
₦2,440.83 billion (4.4 per cent).

Jun-22
Dec-22
Jun-23
Dec-23
Jun-24
HHI
Concentration Ratio
CR Deposits
CR Assets
CR (Largest -Deposits)
CR (Largest -Assets)
HHI (Deposits)
HHI (Assets)


FINANCIAL STABILITY REPORT – JUNE 2024

Table 2.3: Sectoral Credit Utilisation
ITEM
Jun-23
Dec-23
Jun-24
Percentage Share in Total
% Change Between
₦’’Billion
₦’’Billion
₦’’Billion
Jun-23
Dec-23
Jun-24
(1) &
(2)
(2) &
(3)
SECTORAL CREDIT
UTILISATION

[a] Agriculture

[b] Industry
16,313.8

18,781.93
24,571.7


of which Manufacturing

[c] Services
19,326.0

23,498.84
28,701.1


of which Finance, Insurance & Capital Market

Trade/General Commerce

TOTAL PRIVATE SECTOR
CREDIT
37,479.3

44,536.13
55,713.8

18.83
25.10

2.1.3. Consumer Credit
Consumer credit outstanding rose by 38.40 per cent to ₦4,728.23 billion, compared with
₦3,416.42 billion at end-December 2023. Consumer credit as a share of total claims on the
private sector stood at 8.49 per cent, relative to 7.67 per cent at end-December 2023. Personal and retail loans accounted for 73.35 per cent and 26.65 per cent of the total consumer
credit, compared with 77.53 per cent and 22.47 per cent, respectively, at end-December
2023.
Figure 2.2 Consumer Credit


Dec-21
Jun-22
Dec-22
Jun-23
Dec-23
Jun-24
₦'Billion
Per cent (%)
Ratio of consumer credit to claims on private sector (lhs)
Consumer credit (rhs)


FINANCIAL STABILITY REPORT – JUNE 2024

2.2. Composition of Banks and Other Financial Institutions
The number of licensed Commercial, Merchant and Non-Interest Banks (CMNBs) reduced
to 35 following the revocation of the licence of a commercial bank. The licensed CMNBs
comprised 25 commercial, six merchant, and four non-interest banks (NIBs). Seven commercial banks with international authorisation had 65 offshore entities, consisting of 56 subsidiaries, four representative offices, one affiliate, three branches and one agent bank at
end-June 2024. Also, there were seven financial holding companies and one representative
office of a foreign bank, same as in the preceding half-year. The Bank granted approval to
a commercial bank to establish a subsidiary in Tanzania in the review period.
In the review period, the Bank licensed 70 Microfinance Banks (MFBs) and four Finance
Companies (FCs), while the number of Payment Service Banks (PSBs) remained five.
However, the total number of Other Financial Institutions (OFIs) decreased to 2,526, reflecting the revocation of the licences of 4,173 BDCs for non-compliance with regulatory
requirements.


Table 2.4: Composition of Banks and Other Financial Institutions
S/N
Type
End-Dec 2023
End-Jun 2024
Change

CMNBs
Commercial Banks:
•
International
•
National
•
Regional
Merchant Banks:
•
National
Non-Interest Banks:
•
National

(1)

A
Sub-total

(1)

Microfinance Banks:
National
State
Tier 1 Unit
Tier 2 Unit

Bureaux de Change
5,689
1,516
(4,173)

Finance Companies

Development Finance Institutions

FINANCIAL STABILITY REPORT – JUNE 2024

Primary Mortgage Banks

B
Sub-total
6,576
2,477
(4,247)

Financial Holding Companies

Representative Office

Payment Service Banks

C
Sub-total

Grand Total (A+B+C)
6,625
2,490
4,135

2.3. Financial Markets
Global financial markets were characterised by significant volatility and uncertainty, driven
by several factors, including moderate interest rate hikes and inflationary pressures. These
influenced investor sentiments, asset prices, and capital flows worldwide. The challenges
were exacerbated by geopolitical tensions in the Middle East and the Russia-Ukraine crisis.
Despite these challenges, the Nigerian financial markets remained resilient in the first half
of 2024.

2.3.1. Money Market
2.3.1.1.
Interbank Market Rates
The inter-bank money market remained active, dominated by collateralised transactions,
with marginal participation in unsecured transactions. Inter-bank money market rates
trended upward in the first half of 2024, compared with the preceding half. The factors that
impacted the market included monetary policy rate hikes, fiscal flows, Cash Reserve Ratio
(CRR) maintenance operations, discount window operations, central bank and treasury securities maturities, open market operations, as well as foreign exchange market operational
changes. In the review period, the Open-Buy-Back (OBB) rate trended mostly above the
upper band of the policy rate corridor.

On January 2, 2024, the OBB weighted daily average rate opened at 13.85 per cent and
closed at 25.14 per cent on June 28, 2024, compared with 1.42 per cent on July 3, 2023,
and 15.54 per cent on December 29, 2023. During the review period, the daily OBB rate
ranged between 4.32 and 35.54 per cent, compared with 0.92 and 26.84 per cent in the
second half of 2023. In the unsecured segment of the market, the weighted daily average
rate opened at 15.75 per cent on January 3, 2024, higher than 1.33 per cent recorded on
July 4, 2023.

Similarly, the weighted daily average inter-bank call rate closed at 26.00 per cent on June
28, 2024, compared with 15.75 per cent on December 28, 2023. The unsecured inter-bank
call rate ranged from 4.29 to 32.25 per cent in the review period, compared with 0.99 to
25.00 per cent, in the second half of 2023.

The monthly average OBB and inter-bank call rates closed at 26.64 and 25.13 per cent at
end-June 2024, compared with 17.25 and 17.96 per cent at end-December 2023,


FINANCIAL STABILITY REPORT – JUNE 2024

respectively. The volatility level in the money market decreased to 1.08 per cent and 1.94
per cent from 3.22 per cent and 11.14 per cent in the preceding half, reflecting the positive
impact of various initiatives implemented by the Bank.


Figure 2.3 Volatility in Open-Buy-Back Interest Rates


Figure 2.4 Volatility in Interbank Call Interest Rates


04-Jul-23
12-Jul-23
20-Jul-23
28-Jul-23
05-Aug-23
13-Aug-23
21-Aug-23
29-Aug-23
06-Sep-23
14-Sep-23
22-Sep-23
30-Sep-23
08-Oct-23
16-Oct-23
24-Oct-23
01-Nov-23
09-Nov-23
17-Nov-23
25-Nov-23
03-Dec-23
11-Dec-23
19-Dec-23
27-Dec-23
Volatility (%)
OBB Volatility - 2nd Half 2023

03-Jan-24
11-Jan-24
19-Jan-24
27-Jan-24
04-Feb-24
12-Feb-24
20-Feb-24
28-Feb-24
07-Mar-24
15-Mar-24
23-Mar-24
31-Mar-24
08-Apr-24
16-Apr-24
24-Apr-24
02-May-24
10-May-24
18-May-24
26-May-24
03-Jun-24
11-Jun-24
19-Jun-24
27-Jun-24
Volatility (%)
OBB Volatility - 1st Half 2024

Volatility (%)
Int. Bank Volatility - 2nd Half 2023

Volatility (%)
Int. Bank Volatility - 1st Half 2024


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 2.5 Money Market Rates


2.3.1.2.
Deposit and Lending Rates
The sustained contractionary monetary policy stance in the first half of 2024, aimed at moderating the persistent rise in inflation, resulted in higher interest rates. Hence, the weighted
average prime and maximum lending rates rose by 1.10 percentage points and 0.81 percentage point to 15.25 per cent and 28.38 per cent, respectively, above their levels in the
preceding half-year.
Similarly, weighted average term deposit rate increased by 2.61 percentage points to 9.50
per cent, from 6.89 per cent in the preceding half-year. The spread between the maximum
lending rate and the weighted average term deposit rate narrowed to 18.88 percentage
points in the preceding half-year.

Figure 2.6 Interest Rates Spread


Per cent (%)
Jul-23 Aug-

Sep-23 Oct-23 Nov-

Dec-23 Jan-24 Feb-24 Mar-

Apr-24 May-

Jun-24
Inter-Bank Call

Open Buy Back

MPR

SLF

SDF

Per cent (%)
Max Lending minus Weighted Average Savings & Time/Term Deposits rate
Max Lending minus Weighted Average Deposits rate (Demand, Saving, Time/Term)


FINANCIAL STABILITY REPORT – JUNE 2024

2.3.1.3.
Nigerian Treasury Bills
The value of the Nigerian Treasury Bills (NTBs) for 91-, 182- and 364-day tenors allotted in
the first half of 2024 was ₦8,392.45 billion, an increase of 106.81 per cent, above the
₦4,048.38 billion in the preceding half-year. Total subscriptions increased by 45.35 per cent
to ₦19,207.42 billion, reflecting investors’ appetite for high-yield, risk-free securities. The
average stop rates were higher at 14.69, 15.69 and 19.02 per cent, compared with 5.85,
8.36 and 12.57 per cent for the 91-day, 182-day and 364-day tenors, respectively, in the
preceding half-year.

Figure 2.7 Primary Market: Nigerian Treasury Bills Allotment

Figure 2.8 Primary Market: NTBs Transactions


Jul-23 Aug-23Sep-23 Oct-23Nov-23Dec-23 Jan-24 Feb-24 Mar-

Apr-24 May-

Jun-24
%
₦'B
Offer (₦'B)
Subscription (₦'B)
Maturities (₦'B)
Ave. Rates % (R.H.S)
DMBs,
₦2,852.59bn
70.29% ,
MBs,
₦735.69bn
18.13%
Mandate
₦402.57bn
9.92%
Internal Customers,
₦67.29bn 1.66%
End - December 2023
DMBs
MBs
Mandate
Internal Customers
DMBs, ₦6, 124.85bn 72.98%
MBs, ₦ 1,894.00 bn
22.57%
Mandate,
₦290.23bn
3.46%
Internal Customers,
₦83.38bn 0.99%
End- June 2024
DMBs
MBs
Mandate
Internal Customers


FINANCIAL STABILITY REPORT – JUNE 2024

The NTBs outstanding at end-June 2024 was ₦11,808.18 billion, a significant increase from
₦6,522.00 billion at end-December 2023.
Figure 2.9 Holdings of NTBs Outstanding (Per cent and ₦’Billion)


2.3.2. Nigerian Foreign Exchange Market
Total foreign exchange sales by the Bank increased by 182.69 per cent to US$1.47 billion,
from US$0.52 billion in the second half of 2023. This was part of measures undertaken to
enhance foreign exchange (FX) supply and maintain exchange rate stability during the review period.
The Bank purchased US$0.56 billion, resulting in net sales of US$0.91 billion, compared
with US$0.39 billion and US$0.13 billion in the second half of 2023, respectively. Forwards
contracts valued US$1.72 billion matured during the review period, compared with US$9.87
billion in the preceding half-year.
Figure 2.10 Transactions at the Nigerian Foreign Exchange Market


Sale
Purchase
US$ Million
H1 2024 (US$ Million)
H2 2023 (US$ Million)
Commercial Banks, ₦
4,674.57 , 72%
CBN, ₦ 803.83 , 12%
End-Dec 2023
Commercial Banks
Corporates
CBN
Commercial Bank, ₦
7,967.30 Bn, 70.00%
Corporates, ₦
2,406.41 Bn,
18.00%
CBN, ₦ 1,434.47 Bn, 12.00%
End-Jun 2024
Commercial Banks
Corporates
CBN


FINANCIAL STABILITY REPORT – JUNE 2024

2.3.2.1.
Foreign Exchange Rate
The exchange rate at the Nigerian Foreign Exchange Market (NFEM), previously known as
Investors’ & Exporters’ (I&E) window, opened at ₦988.46/US$ on January 2, 2024, and
closed at ₦1,505.30/US$ at end-June 2024, reflecting a depreciation of 52.29 per cent
compared with 20.49 per cent at end-December 2023. The depreciation during the review
period was due largely to the interplay of demand and supply as the market sought to
achieve price discovery, following exchange rate unification.

Figure 2.11 Monthly Average Rates at the NFEM


2.3.2.2.
Over-the-Counter Foreign Exchange Futures
The Bank did not execute over-the-counter (OTC) FX Futures contracts in the first half of
2024, compared with US$1.22 billion in the preceding half-year. Matured contracts decreased to US$3.03 billion, from US$3.72 billion at end-December 2023. The outstanding
contracts decreased to US$0.17 billion at end-June 2024, from US$5.44 billion at end-December 2023.
2.3.3. Capital Market
Activities at the Nigerian capital market were bullish in the first half of 2024 as indicated by
the performance of the equities, bonds, and exchange-traded products segments. This positive performance was attributed to strong corporate earnings, economic reforms and positive investor sentiments.
2.3.3.1.
New Issues of Securities
During the review period, the overall value of capital raised increased notably, driven by
growth in the value of private placements and rights issues. The number and value of private placements increased to five from two and ₦149.44 billion from ₦1.97 billion, respectively, in the preceding half-year, indicating issuer preference for the equity market segment.
In the debt market, the number of issues declined significantly, driven by reduced FGN
bonds and sub-national bond issuances. Despite the reduction in the number of issues, the
value increased significantly by 56.84 per cent to ₦3,868.56 billion, from ₦2,466.62 billion
in the preceding period.


Jul-23
Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24
N/US$


FINANCIAL STABILITY REPORT – JUNE 2024

Table 2.5: New Issues in the Capital Market
Type
Number of Issues
Value of Issues (N’Bn)
End-Dec

End-June

Change
%
End-Dec

End-Jun

Change
%
IPO

Public Offer/Offer for Sale

0.12

7,740
Private Placements

1.97
149.44
7,486.80
Rights


Total Equities

61.97
863.92
1,293.24
Corporate Bonds


Sub-national Bonds

-100
146.50

-100
FGN Bonds


Eurobond (415.58/$)

Total Debt


Total (Equities & Debt)


Source: SEC, DMO


2.3.3.2.
Equities Market
The Nigerian equities market was bullish in the first half of 2024, outperforming major global
indices and other African markets as the NGX All-Share Index (ASI) rose by 33.81 per cent
to 100,057.49 at end-June 2024 (Appendix 1). Similarly, the equity market capitalisation
grew by 38.33 per cent to N56.61 trillion, indicating robust investor confidence, driven by
strong corporate earnings, improved market valuation and government reforms.
The NGX sub-indices recorded mixed performances as the NGX Alternative Securities Market (ASeM) and NGX Industrial Indices showed significant growth at 135.25 and 73.14 per
cent, respectively, reflecting strong activities in those sectors. Similarly, the NGX AFR Div
Yield Index grew by 43.50 per cent. However, the NGX Banking Index declined by 7.47 per
cent.
Table 2.6: Nigerian Exchange Limited Indices, ASI and Equity Market Capitalisation
Description
End-Jun

(a)
End-Dec

(b)
End-Jun

(c)
End-Dec

(d)
End-Jun

(e)
Change
%
(d&e)
NGX ASI (Points)

Equity Market Cap (N’trn)

NGX Main-Board Index

NGX 30 Index

NGX CG Index

NGX Premium Index

NGX Banking Index

NGX Pension Index

NGX Insurance Index


FINANCIAL STABILITY REPORT – JUNE 2024

NGX ASeM Index

NGX-AFR Bank Value Index

NGX AFR Div Yield Index

NGX Meri Growth Index

NGX Meri Value Index

NGX Consumer Goods Index

NGX Oil/Gas Index

NGX Lotus Islamic Index

NGX Industrial Index

NGX Growth Index

NGX Sovereign Bond Index

NGX Pension Board


1,308.54
1,771.41
35.37
Source: NGX Reports

2.3.3.3.
Foreign and Domestic Participation
Foreign Portfolio Investment (FPI) inflows to the equity market totalled ₦229.07 billion,
while divestments (outflows) stood at ₦311.41 billion, reflecting a net outflow of ₦82.34
billion at end-June 2024. In comparison, inflows in the second half of 2023 amounted to
₦102.75 billion, while divestments stood at ₦162.76 billion, reflecting a net outflow of
₦60.01 billion. The net outflow in the review period reflected the cautious sentiments of
foreign investors over market stability amidst a broad range of economic reforms.
Foreign portfolio transactions accounted for 20.83 per cent of the total equity transactions,
compared with 12.48 per cent in the preceding half-year. Domestic transactions accounted
for the balance of 79.17 per cent, compared with 87.52 per cent in the preceding period.


Table 2.7: Foreign and Domestic Portfolio Participation in Equities Trading
Transaction Type
End-Jun 2023
(a)
End-Dec 2023
(b)
End-Jun 2024
(c)
%change
(b&c)
Equity transactions (N’b)

Foreign portfolio transaction (N’b)

Foreign (%)

Domestic transactions (N’b)

Domestic (%)

Foreign inflow (N’b)

Foreign outflow (N’b)

NGX-ASI

Source:NGX


FINANCIAL STABILITY REPORT – JUNE 2024

2.3.3.4.
National Association of Securities Dealers
The National Association of Securities Dealers (NASD) OTC Market recorded significant
growth. The NASD Unlisted Securities Index rose to 1,533.00 points at end-June 2024, an
increase of 65.29 per cent from 927.47 points at end-December 2023. Similarly, the market
capitalisation increased by 67.09 per cent to ₦2,100.74 billion, from ₦1,257.23 billion at
end-December 2023. The total value of transactions increased by 158.42 per cent to
₦21,617.76 million, from ₦8,365.42 million at end-December 2023.
Table 2.8: Transactions on the NASD OTC Market
OTC Market
End-Dec

End-Jun

% change
Unlisted Index(Points)
927.47
1,533.00
65.29
Market cap (N'bn)
1,257.23
2,100.74
67.09
Number of Deals
2,009
3,176
58.09
Volume traded (N'mn)
1,662.71
961.27
-42.19
Total value (N'mn)
8,365.42
21,617.76
158.42
Source: NASD

2.3.3.5.
Debt Market
The stock of domestic debt outstanding at end-June 2024 stood at ₦56,203.30 billion, representing an increase of 17.28 per cent above ₦47,921.58 billion at end-December 2023.
This was mainly attributed to increased allotments of Nigerian Treasury Bills and FGN
Bonds.
Government Debt Market Capitalisation expanded by 41.20 per cent to ₦46.13 trillion, suggesting increased government borrowing and higher bond issuance. However, Corporate
Debt Market Capitalisation declined slightly by 1.68 per cent to ₦1.17 trillion, reflecting
reduced corporate borrowing owing to higher interest rates and a shift in corporate financing
strategies.


Table 2.9: NGX Debt Market Capitalisation
Markets
End-Jun 2023
End-Dec 2023
End-Jun 2024
Change (%)
Government Debt Market Cap (N’trn)

Corporate Debt Market Cap (N’trn)

Source: NGX Reports


FINANCIAL STABILITY REPORT – JUNE 2024

Table 2.10: Outstanding Debt Instruments
Instruments
End-Jun 2023
(a)
End-Dec 2023
(b)
End-Jun 2024
(c )
Change
(b & c)
Proportion
End-Dec
2023)
Proportion
of Total
End-Jun

(₦'Billion)
%
FGN Bonds*

Nig. Treasury Bills

FGN Savings Bonds

FGN Sukuk

FGN Green Bond

0.00
0.03
0.02
Nig. Treasury Bonds
50.99

0.00
0.00
FGN
Promissory
Notes

FGN
Promissory
Notes (FCY Denominated)


1,090.30
0.00
1.56
Sub-National Bond
135.02
379.14

-3.73
0.69
0.52
Corporate Bonds

Sukuk- Sub-National

Green-Corporate
Bond

TOTAL


* Figure includes Restructured Ways and Means Advance to FGN Bond
22,719.70
* Restructured states Commercial loans into FGN Bonds
680,420.11

2.3.3.6.
New Issues, Maturities and Outstandings
2.3.3.6.1. FGN Bonds
New issues and re-openings of FGN Bonds valued ₦4,660.00 billion were offered during
the review period. This reflected an increase of 115.74 per cent above the ₦2,160.00 billion
in the preceding period. Public subscriptions and sales also increased to ₦4,899.14 billion
and ₦3,994.66 billion, compared with ₦3,263.52 billion and ₦2,293.88 billion, respectively,
in the second half of 2023.
The yield curve was inverted during the review period, in contrast to the upward sloping
shape in the preceding period, indicating investors' preference for shorter-term instruments.


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 2.12 Yield Curve

Source: FMDQ-OTC Plc

2.3.3.6.2. FGN Savings Bonds
FGN savings bonds worth ₦21.81 billion, comprising 2-year and 3-year tenors were offered
and allotted in the review period, an increase of 108.11 per cent from ₦10.48 billion in the
preceding half-year. The coupon rates for the 2-year and 3-year tenors ranged from
11.0330 to 17.4140 per cent and 12.0330 to 18.4140 per cent, respectively, compared with
a range of 7.9150 to 12.4640 per cent and 8.9150 to 13.4640 per cent in the preceding halfyear. Bond maturities amounted to ₦2.01 billion. The FGN savings bonds outstanding stood
at ₦55.19 billion at end-June 2024.

2.3.3.6.3. FGN Green Bonds
There was no issuance or maturity of FGN Green bonds during the review period, as in
the preceding period. Thus, the outstanding stock of the bonds remained unchanged at
₦15.00 billion.

2.3.3.6.4. FGN Sukuk
There was no new issue in the review period compared to ₦350.00 billion in the preceding half-year. The total FGN Sukuk outstanding was ₦1,092.57 billion.
2.3.3.6.5. Sub-National Bonds
There was no new issue in the review period, compared with ₦115.00 billion in the preceding period. However, sub-national bonds worth ₦0.60 billion matured and ₦13.54 billion
were redeemed. Sub-national bonds outstanding decreased to ₦365.00 billion, from
₦379.14 billion at end-December 2023.

2.3.3.6.6. Corporate Bonds
Corporate bonds amounting to ₦6.65 billion were issued while bonds worth ₦10.75 billion
and ₦3.64 billion were redeemed and matured, respectively during the review period.

Yield %
Time to Maturity (years)
28/06/2024
29/12/2023


FINANCIAL STABILITY REPORT – JUNE 2024

Bonds outstanding stood at ₦1,647.15 billion, compared with ₦1,654.89 billion at end-December 2023.

2.3.3.7.
Bonds - Secondary Market
The bond market experienced significant mixed performance during the review period. Market capitalisation (Mcap) across various categories of bonds recorded a substantial rise.
Federal bonds Mcap increased to ₦46.13 trillion from ₦32.67 trillion in December 2023.
Conversely, State and local government bonds slightly declined to ₦349.00 billion from
₦401.05 billion in the second half of 2023. The Mcap for corporate bonds showed minimal
fluctuation, decreasing marginally to ₦1.17 trillion from ₦1.19 trillion. Overall, the total bond
Mcap increased to ₦47.65 trillion from ₦34.28 trillion.
Also, the number of deals and value of FGN bonds traded increased to 30 and
175,912,512.79 from 6 and 1,718,228.74, respectively in the preceding period. Similarly,
volume traded increased to 73,272 units from 2,003 units at end-December 2023, reflecting
heightened investor participation in the FGN bond market. However, there was no activity
for sub-national and corporate bonds in the review period.
Overall, the bond market recorded strong growth, driven primarily by FGN bonds, state and
local government.
Table 2.11: Market Capitalisation (Debt securities/Bonds)

End-Dec 2023
End-Jun 2024
Supra-National
Federal
32,665,555.35
46,130,210.16
State and Local
401,049.00
348,999.01
Corporate
1,189,398.39
1,171,322.03
Total Mkt Cap (Bonds)
34,279,021.20
47,650,531.21
FGN Bond
Deal

Volume
2,003.00
173,272.00
Value
1,718,228.74
175,912,512.79

FMDQ total turnover stood at ₦73,727.70 from ₦147,978.48 billion, comprising transactions in Foreign Exchange, FGN Bonds, Short-term Bonds, Treasury Bills, Open Market
Operation (OMO) bills, and Unsecured Private Placements/Takings. The turnover reflected
a decrease of 50.18 per cent compared with the level in the second half of 2023. Eurobond
accounted for 12,769.10 per cent, representing the highest proportion of the turnover, followed by Short-Term Bonds (1-3yrs) at 126.83 per cent.


FINANCIAL STABILITY REPORT – JUNE 2024

Table 2.12: FMDQ Market Size
S/N
SECTOR
End-Jun

End-Dec

End-Jun

End-Dec

End-Jun

Change
(₦'bn)
(₦'bn)
(₦'bn)
(₦'bn)
(₦'bn)
(%)

FGN Bond


Agency Bonds

0.05

-
0.00

State/Municipal Bonds
0.08
0.29

6.90
0.00

Corporate Bonds
15.26
27.04

1.42
0.00

Supranational Bonds

-
0.00

Sukuk


Green Bonds

-
0.00

Eurobond


Short-Term Bonds (13yrs)


Treasury Bills


OMO Bills


Commercial Papers
1.62
1.99

-
0.00

Unsecured Placements/Takings


Foreign Exchange


CBN Special Bills


Total Market Size


2.3.3.8.
Mutual Funds
The Net Asset Value (NAV) of registered funds stood at ₦3,088.60 billion at end-June 2024,
indicating an increase of 37.91 per cent, compared with ₦2,239.20 in the preceding halfyear. The increase was mainly attributed to 92.36 per cent, 20.69 per cent and 20.52 per
cent growth in Dollar Funds, Money Market and Exchange Traded Funds, respectively.


FINANCIAL STABILITY REPORT – JUNE 2024

Table 2.13: Collective Investment Schemes (₦’Billion)

End-Jun 2023
End-Dec 2023
End-June

Change

(%)

(a)
(b)
(c)
(b&c)
Ethical Funds

Shariah Compliant Funds

Dollar Funds

Bond/Fixed Income Funds

Equity Based Funds

Real Estate Funds

Money Market Funds

Balanced Based Funds

Exchange Traded Funds

Infrastructure Funds

Total

Source: SEC
During the review period, the Exchange-Traded Funds (ETFs) Net Asset Value and Unit
holders grew by 16.38 per cent and 104.00 per cent, from N10,297.25 and 1,089, respectively at end-December 2023. The increase in the number of Unit Holders indicated growing
investor interest and confidence in the ETFs and was attributable to favourable market
conditions, increased awareness of ETFs, and attractive returns. However, the Number of
Units declined by 16.00 per cent.
Table 2.14: NGX Exchange Traded Products
Net Asset Value
Unit Holders
Number of Units
End-Dec

End-Jun

Change
(%)

EndDec

End-Jun

Change
(%)

End-Dec 2023
End-Jun 2024
Change
(%)

Exchange
Traded
Funds*

* ETPs include Exchange traded funds and exchange traded futures Source: SEC

2.3.4. Commodities Market
Trading activities were low on the AFEX Commodity Exchange, Lagos Commodities and
Futures Exchange (LCFE) and Nigeria Commodity Exchange (NCX). There were no activities on Prime Commodity Exchange Limited (PCX) and Gezawa Commodity Market & Exchange Limited in the review period.


FINANCIAL STABILITY REPORT – JUNE 2024

2.3.4.1.
AFEX Commodities Exchange
The value of transactions on the AFEX Commodities Exchange decreased by 38.59 per
cent to ₦60,655.05 million, from ₦98,777.97 million at end-December 2023. The volumes
of most agricultural commodities such as cashew nut, ginger, maize, paddy rice, sesame,
sorghum, soya bean and wheat declined and affected the total market value. However, the
price of cocoa increased by 315.71 per cent, owing to stronger export demand. The decline
in the value of most commodities was largely due to production-related challenges, such
as weather conditions, insecurity and high cost of inputs.
Table 2.15: Transactions on AFEX (N’M)

H2 2023
H1 2024

H2 2023
H1 2024

H2 2023
H1 2024


Total No of Deals
% change
Total Volume Million/KG
% change
Total Value ₦ (‘M)
% change
Cashew
Nut


Cocoa


Ginger


-100.00
Maize
2,697


Paddy
Rice


Sesame


Sorghum


Soyabean


Wheat

-100.00
2.78

-100.0
1,358.80

-100.00
Fixed Income


13,846.32
33,461.08
141.66
Total

Source: AFEX

2.3.4.2.
Lagos Commodities and Futures Exchange
The volume of transactions on the Lagos Commodities and Futures Exchange (LCFE) increased during the review period. The total volume of Eko Gold Coin traded increased by
69.88 per cent to 547g from 322g. Similarly, the volume of paddy rice increased by 11.85
per cent to 293.73 MT from 262.61 MT.


FINANCIAL STABILITY REPORT – JUNE 2024

Table 2.16: Lagos Commodities and Futures Exchange (LCFE) Transactions

End-Dec 2023
End-Jun

End-Dec

End-Jun

Total Volume
% change
Total Value ₦ (‘M)
% change

Eko Gold Coin (g)


Paddy Rice (MT)

Source: SEC
2.3.4.3.
Nigeria Commodity Exchange
The volume and value of transactions on the NCX declined significantly, compared with the
preceding period. The total volume dropped by 99.69 per cent to 6.85 MT from 2,191.3 MT.
The value also fell by 99.41 per cent to ₦6 million, from ₦1.01 billion in the preceding half
year.

Table 2.17: Nigeria Commodities Exchange (NCX) Transactions

Total Volume
(gm /MT)
% change
Total Value
₦ ‘Bn
% change
H2 2023

H1 2024

Source: SEC
2.4. Securities and Exchange Commission Regulatory and Supervisory Activities
2.4.1. NGX Invest Platform
The Nigerian Exchange Group (NGX Group) launched an e-offering platform, “NGX Invest,”
to enable direct access for a wider range of investors to the stock market. Two banks utilised the NGX Invest Application Programming Interface (API) to distribute their offerings
to retail investors during the review period.
2.4.2. Examination/Inspection/Supervision
The Commission sustained its Risk-Based Supervision (RBS) examination of entities within
the Holding companies in collaboration with other financial system regulators. The Commission examined five intermediaries of three holding companies in the review period. The
outcome of the examinations revealed some infractions, which the erring institutions
were required to address.

2.4.3. Reporting Standards, Guidelines and Rules
In the first half of 2024, the SEC sustained its collaboration with other financial sector regulators and agencies by participating in awareness campaigns against illegal fund


FINANCIAL STABILITY REPORT – JUNE 2024

managers, information sharing and AML/CFT/CPF compliance workshops, amongst others. It also directed Capital Market Operators to ensure compliance with the Sanctions Alert
System and enhance reporting on Politically Exposed Persons (PEPs) and Suspicious
Transaction Reports (STRs).
2.5. Real Sector Interventions
During the review period, the Bank pulled back from direct development finance initiatives
and focused more on its core mandates and advisory role that support inclusive growth and
sustainable economic development. Consequently, disbursements declined by 93.01 per
cent to ₦15.58 billion from ₦222.97 billion. Repayments amounted to ₦380.40 billion, compared with ₦533.59 billion in the second half of 2023.
2.5.1. Agricultural Policy Support
There was no disbursement during the period under review, compared with ₦19.27 billion
in the preceding period. Total recoveries stood at ₦127.48 billion, compared with ₦256.99
billion in the second half of 2023. Cumulative outstanding loans under this programme
stood at ₦373.15 billion, compared with ₦500.63 billion in the preceding period.

Table 2.18: Agricultural Policy Support


End–Dec 2023
End–Jun 2024
S/N
Programme
Disbursement
Repayment (₦'
Billion)
Outstanding
(₦' Billion)
Disbursement
Repayment
(₦' Billion)
Outstanding
(₦' Billion)
(₦' Billion)
(₦' Billion)

Anchors Borrowers Programme (ABP)


Accelerated
Agricultural
Development
Scheme
(AADS - DCRR)


Accelerated
Agricultural
Development
Scheme
(AADS)


Commercial
Agriculture
Credit Scheme (CACS)


Paddy Aggregated Scheme
(PAS)


Maize Aggregated Scheme
(MAS)


Rice Distribution Facility
(RDF)
-
-
-

National Food Support
Programme (NFSP)


Presidential Fertilizer Initiative (PFI)


TOTAL
19.27
256.99
500.63

127.48
373.15


FINANCIAL STABILITY REPORT – JUNE 2024

2.5.1.1.
Agricultural Credit Guarantee Scheme
A total of 11,082 loans, valued ₦3.77 billion, were guaranteed under the Scheme, compared with 24,667 loans, valued ₦5.39 billion at end-December 2023. Also,16,771 guaranteed loans, valued ₦3.87 billion were repaid in the first half of 2024, compared with 20,131
guaranteed loans, valued ₦3.62 billion in the preceding half-year.
The sum of ₦1.07 million was paid as default claims for 15 beneficiaries to a Participating
Financial Institution (PFI), compared with a claim payment valued ₦329,698.12 in the preceding period. In addition, 3,133 Interest Drawback Programme (IDP) claims, valued
₦77.17 million were paid.
Total recoveries decreased by 49.73 per cent to ₦126.48 billion, from ₦251.48 billion in the
preceding period, while total disbursements declined significantly by 42.86 per cent to
₦11.01 billion from ₦19.27 billion.
Table 2.19: Agricultural Policy and Institutional Support


End–Dec 2023
End–Jun 2024
S/N
Initiative
No.
of
ACGSF
Loans
Guaranteed
Value (₦)
No.
of
ACGSF
Loans
Guaranteed
Value (₦)

Agricultural Credit Guarantee
Scheme (ACGS)


TOTAL


2.5.2. Industrial Policy Support
There were no disbursements during the review period, while total recoveries increased by
213.86 per cent to ₦8.60 billion from ₦2.74 billion in the preceding half-year. Total outstanding loans stood at ₦526.27 billion, compared with ₦534.87 billion in the preceding
period.
Table 2.20: Industrial Policy Support


End–Dec 2023
End–Jun 2024
S/N
Initiative*
Disbursement
Repayment (₦'
Billion)
Outstanding
(₦' Billion)
Disbursement
Repayment
(₦' Billion)
Outstanding
(₦' Billion)
(₦' Billion)
(₦' Billion)

Targeted
Credit
Facility
(TCF)


Creative Industry Financing
Initiative (CIFI)


National Youth Intervention
Fund (NYIF)
-
-
1.96


1.96

Agri-business Small & Medium Enterprises Intervention Scheme (AgSMEIS)


FINANCIAL STABILITY REPORT – JUNE 2024

TRADER MONI


Tertiary Institution Entrepreneurship Scheme (TIES)


Micro, Small and Medium
Enterprise
Development
Fund (MSMEDF)


TOTAL

2.74
534.87

8.60
526.27
*Excludes youth empowerment development programme as the loan had been fully repaid and closed
2.5.3. Export Policy Support
There were no disbursements during the review period, while total recoveries increased by
41.07 per cent to ₦27.58 billion from ₦19.55 billion in the preceding half-year. Total outstanding loans stood at ₦166.04 billion, compared with ₦193.62 billion in the preceding
period.
Table 2.21: Export Policy Support


End–Dec 2023
End–Jun 2024
S/N
Initiative
Disbursement
Repayment (₦'
Billion)
Outstanding
(₦' Billion)
Disbursement
Repayment
(₦' Billion)
Outstanding
(₦' Billion)
(₦' Billion)
(₦' Billion)

Non-oil Export Stimulation Facility (NESF)


Export Financing Initiative (EFI)


Export
Development
Fund (EDF)


TOTAL

19.55
193.62

27.58
166.04

2.5.4. Energy Policy Support
Total recoveries in the review period increased by 6.90 per cent to ₦60.42 billion from
₦56.52 billion, while disbursements stood at ₦15.58 billion. Total outstanding stood at
₦460.80 billion, compared with ₦509.64 billion in the preceding period.

Table 2.22: Energy Policy Support


End–Dec 2023
End–Jun 2024
S/N
Initiative
Disbursement
Repayment (₦'
Billion)
Outstanding
(₦' Billion)
Disbursement
Repayment
(₦' Billion)
Outstanding
(₦' Billion)
(₦' Billion)
(₦' Billion)

Power and Airline Intervention Fund (PAIF)

Equity

Nigerian Electricity Market
Stabilization Fund (NEMSF)


Nigerian Electricity Market
Stabilization Fund- 2 (NEMSF


Nigerian Electricity Market
Stabilization
Fund-3
(NEMSF-3)


FINANCIAL STABILITY REPORT – JUNE 2024

Nigerian
Bulk
Electricity
Trading- Payment Assurance
Fund (NBET-PAF)


Solar
Connection
Facility
(SCF)


National Mass Metering Programme (NMMP)


Intervention Facility for National
Gas
Expansion
(IFNGEP)


TOTAL


2.5.5. Other Policy Support Programmes
There were no disbursements during the review period, while total recoveries stood at
₦159.86 billion from ₦210.67 billion, compared with ₦202.05 billion in the preceding halfyear. Total outstandings stood at ₦2,672.21 billion, compared with ₦2,832.06 billion in the
preceding period.

Table 2.23: Other Policy Support Interventions


End–Dec 2023
End–Jun 2024
S/N
Programme
Disbursement
Repayment (₦'
Billion)
Outstanding
(₦' Billion)
Disbursement
Repayment
(₦' Billion)
Outstanding
(₦' Billion)
(₦' Billion)
(₦' Billion)

CBN-Bank of Industry Intervention Fund (CBIF)


Real Sector Support Facility
(RSSF)


Textile Support Intervention
Facility (TSIF)


Differentiated Cash Reserve
Requirement (RSSF-DCRR)


Small & Medium Enterprise
Restructuring & Refinancing
Facility (SMERRF)

Equity*

Health Sector Intervention
Facility (HSIF)


Health Sector Research &
Development
Intervention
Scheme (HSRDIS)


100 for 100 Policy for Production and Productivity


Shared Agency Network Expansion Facility (SANEF)


TOTAL
202.05
210.67
2,832.06

159.86
2,672.21
Note; Equity* means conversion of all the outstanding balances of the CBN intervention funds on some of the facilities managed by the
Bank of Industry.


FINANCIAL STABILITY REPORT – JUNE 2024

2.6. Financial Inclusion and Institutional Support
2.6.1. Financial Inclusion
The Bank sustained its collaboration with financial services providers and other stakeholders in its drive towards achieving a target of 95 per cent financial inclusion by December
2024, as set in the National Financial Inclusion Strategy. Some of the key initiatives included the Shared Agent Network Expansion Facility (SANEF) programme, which
onboarded 65,428 agents in the first half of 2024, bringing the total number of agents to
1,892,516. Consequently, the number of access points increased to 1,706 from 1,646
agents per 100,000 adults at end-December 2023. In addition, a total of 2,238,172 BVNs
were enrolled during the review period, of which 1,120,784 (50.08 per cent) were in respect
of female customers. Also, the number of Active PoS Terminals rose by 17.34 per cent to
2,022,005 from 1,723,207 in the preceding period.


Table 2.24: Key Financial Inclusion Indicators
Indicator
End-Dec 2023
End- Jun 2024
% Change
New BVN Registration
2,156,628
2,238,172
(3.78)
New BVN Registration (Female)
998,374
1,120,784
(12.26)
Total Agents
1,827,088
1,892, 516
3.58
No. of Onboarded (New) Agents
157,601
65,428
58.49
Nos of Agents Per 100,000 Adults
1,646
1,706
(3.65)
Active PoS Terminals
1,723,207
2,022,005
(17.34)

2.6.2. Financial Literacy and Consumer Education
The Bank sustained financial literacy and consumer education activities during the reporting period. Some of the key activities are highlighted as follows:
2.6.2.1.
SabiMONI Platform
The total enrolment on the financial literacy e-learning platform stood at 11,446, compared
to 12,350 at end-December 2023. The total number of participants that had completed
courses on the platform increased by 38.30 per cent to 2,282 from 1,650 in the preceding
half-year, reflecting improved sensitisation of the public on financial literacy by the Bank.

2.6.2.2.
The 2024 Global Money Week Celebration
The Bank commemorated the 2024 Global Money Week (GMW) with the theme “Plan Your
Money, Secure Your Future”. Activities featured during the Week included financial literacy
fair, which provided a platform for CMNBs to educate children on savings & investments.


FINANCIAL STABILITY REPORT – JUNE 2024

Other activities included excursions by some schools to the NGX, School Mentoring Programme and virtual quiz competitions for selected schools across the six geo-political zone.
2.6.2.3.
Financial Literacy Training for Faith-Based Organizations
The Bank conducted a Training-of-Trainers (ToT) programme for 39 participants from a
faith-based organisation to create awareness on the importance of financial literacy. The
training covered concepts such as savings, budgeting, investment and financial discipline
as fundamental for making informed financial decisions.
2.6.2.4.
Financial Literacy Workshop for Non-Public Schools
The Bank in collaboration with Partnership for Learning for All in Nigeria (PLANE) conducted a 2-day ToT workshop for non-public schools in Kano State on financial budgeting,
planning and records.

2.6.3. National Collateral Registry
There were mixed outcomes in the performance of the activities of the National Collateral
Registry (NCR) during the review period.
The number of financing statements registered in the NCR increased by 49.98 per cent to
54,663. However, the Naira-denominated and the USD-denominated values of financing
statements declined by 78.87 per cent and 62.19 per cent to ₦680.65 billion and
US$157.25 million, respectively, compared with the preceding period.
The financing statements were registered by 58 financial institutions in respect of 38,366
borrowers, compared with 49 financial institutions that registered 57,021 borrowers in the
preceding period. This represented an increase of 18.37 per cent in FIs leveraging the
NCR, but a decline of 32.72 per cent in the number of borrowers who accessed movable
asset-backed financing.
In addition, searches conducted on movable assets (as part of due diligence for encumbrance) in the review period decreased by 8.98 per cent to 83,150, from 90,617 in the
preceding period.

Table 2.25: Transactions on the National Collateral Registry Portal
Debtor Type
No. of Borrowers
No. of Financing Statements
Value of Financing Statements

End-Dec

End-Jun

End-Dec

End-Jun

Currency
End-Dec

End-Jun

Individual

(₦' billion)
226.03
230.83

Large Business

(₦' billion)
419.54
266.37

($' million)
404.45
126.00

Medium Business

(₦' billion)
2,534.40
120.67

($' million)
11.45
31.25

(€' million)
1.90
0.00

Micro Business

(₦' billion)
2.93
32.61


FINANCIAL STABILITY REPORT – JUNE 2024

Small Business

(₦' billion)
37.73
30.17

Total


(₦' billion)
3,220.63
680.65


($' million)
415.90
157.25


(€' million)
1.90
0.00


Furthermore, 15,967 of the financing statements registered were in respect of 16,433
women and women-owned enterprises, representing 42.83 per cent and 29.21 per cent of
the total number of borrowers and the number of financing statements, respectively, in the
first half of 2024. The total Naira-denominated value of financing statements in respect of
women stood at ₦95.56 billion or 14.04 per cent of the total.
The number of women and women-owned enterprises accessing credit secured with movable assets declined by 37.78 per cent. Similarly, the number of financing statements and
the Naira-denominated value of financing statements associated with them declined by
38.09 per cent and 29.77 per cent, respectively.

Table 2.26: Women and Women-owned Enterprises Transactions on the National Collateral Registry
Debtor Type
Women and Women-owned Enterprises
Number of Borrowers
Number of Financing
Statements
Value of Financing Statements
(₦’ billion)


End-Dec

End-Jun

End-Dec

End-Jun

End-Dec

End-Jun 2024

Individual


Large Business

26.19
0.35

Medium Business

45.48
4.92

Small Business

2.66
1.72

Micro Business

0.38
0.35

Total


A total of 160 financial institutions registered 410,161 financing statements valued
₦21,165.20 billion, US$3.67 billion, €12,933,824.83 and £27,352 from inception in 2016 to
end-June 2024.


FINANCIAL STABILITY REPORT – JUNE 2024

3. CENTRAL BANK REGULATORY AND SUPERVISORY ACTIVITIES
3.1. Financial Soundness Indicators
The banking industry recorded strong performance across major financial soundness metrics during the review period. Asset quality improved moderately, while solvency levels remained robust. In addition, liquidity ratio and earnings increased significantly indicating a
resilient performance by the industry. Other Financial Corporations subsector exhibited a
similar upward trend (Appendix 4).
3.1.1. Asset-Based Indicators
3.1.1.1.
Non-Performing Loans Ratio
The quality of banks’ assets improved during the review period as the Non-Performing
Loans (NPL) ratio decreased to 4.12 per cent from 4.34 per cent at end-December 2023,
although the ratio of NPLs net of provisions to capital increased to 5.39 per cent at endJune 2024, from 2.76 per cent in the preceding period. The decline in NPL ratio largely
reflected improved credit risk management practices, especially the sustained implementation of the Global Standing Instruction (GSI) policy.
Figure 3.1 Banking Industry NPLs Ratio

3.1.1.2.
Core Liquid Assets to Total Assets and Short-term Liabilities
Core liquid assets, total assets and deposit liabilities increased by 34.87, 25.41 and 25.33
per cent to ₦28,067.50 billion, ₦145,378.63 billion and ₦95,452.02 billion, respectively. The
growth in the total assets and deposit liabilities of banks was primarily due to the revaluation
of foreign currency denominated assets and liabilities.
endJun-

endDec-

endMar-

endJun-

endDec-

endJun-

NPLs

Specific Provisions

NPLs net provisions to capital

NPL to Gross Loans

Percentage (%)
Amount ('N Billion)
NPLs
Specific Provisions
NPLs net provisions to capital
NPL to Gross Loans


FINANCIAL STABILITY REPORT – JUNE 2024

The ratio of core liquid assets to total assets increased by 1.42 percentage points to 19.31
per cent. Similarly, the ratio of core liquid assets to short-term liabilities improved by 1.88
percentage points to 29.26 per cent.
Figure 3.2 Banking Industry Liquidity Indicators


3.1.1.3.
Income and Expense Ratios
The ratio of interest margin to gross income increased by 6.46 percentage points to 50.07
per cent during the review period. Similarly, the ratio of non-interest expenses to gross
income rose slightly by 1.32 percentage points to 47.65 per cent. However, the ratio of
personnel expenses to non-interest expenses decreased by 4.29 percentage points to
22.15 per cent from 26.44 per cent in the preceding half-year.
Figure 3.3 Income and Expense Ratios


end-Jun-2022
end-Dec-2022
end-Jun-2023
end-Dec-2023
end-Jun-2024
Per cent (%)
Liquid assets (core) to total assets
Liquid assets (core) to short-term liabilities

end-Jun-2022
end-Dec-2022
end-Jun-2023
end-Dec-2023
end-Jun-2024
Per cent (%)
Interest margin to gross income
Noninterest expenses to gross income
Personnel expenses to noninterest expenses


FINANCIAL STABILITY REPORT – JUNE 2024

3.1.1.4.
Exposure of the Banking Industry to Real Estate Sector
The ratio of residential real estate loans to total gross loans increased by 0.12 percentage
point to 0.61 per cent, from 0.49 per cent in the preceding half-year. However, the ratio of
commercial real estate loans to total gross loans decreased marginally by 0.21 percentage
point to 1.76 per cent, compared with 1.97 per cent at end-December 2023.
Figure 3.4 Exposure to Real Estate Sector


3.1.1.5.
Exposure of the Banking Industry to Oil & Gas, Manufacturing and Services Sectors
Banks’ exposure to the oil & gas and services sectors increased, while exposure to the
manufacturing sector decreased. The exposure to oil & gas and services sectors as a proportion to gross loans increased by 3.09 and 0.44 percentage points to 31.33 per cent and
41.73 per cent, respectively. However, the ratio of exposure to the manufacturing sector to
gross loans decreased by 1.08 percentage points to 17.42 per cent.
Credit concentration in the oil & gas and services sectors continued to expose the banking
industry to oil price and exchange rate volatility.

end-Jun-2022
end-Dec-2022
end-Jun-2023
end-Dec-2023
end-Jun-2024
Per cent
Residential real estate loans to total gross loans
Commercial real estate loans to total gross loans


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.5 Exposure of Banking System to Oil & Gas, Manufacturing and Services1


3.1.2. Capital-Based Indicators
The banking industry’s capital adequacy ratio declined marginally to 12.52 per cent, from
12.99 per cent at end-December 2023. Similarly, tier-1 capital to risk-weighted assets decreased to 10.62 per cent, from 10.70 per cent in the second half of 2023.
Figure 3.6 Banking Industry Capital Adequacy Indicators

*The ratios are computed based on IMF-FSI Manual


1 Services include: Real Estate, Finance, Insurance & Capital Market, Education, Upstream and Oil & Gas Services, Power Transmission and Distribution, Information & Communication, Transportation & Storage, General and Others


end-Jun-2022
end-Dec-2022
end-Jun-2023
end-Dec-2023
end-Jun-2024
Percentage (%)
Oil & Gas to Gross Loans
Manufacturing to Gross Loans
Services to Gross Loans

end-Jun-2022
end-Dec-2022
end-Jun-2023
end-Dec-2023
end-Jun-2024
Percentage(%)
Regulatory capital to risk-weighted assets
Regulatory Tier 1 capital to risk-weighted assets


FINANCIAL STABILITY REPORT – JUNE 2024

3.2. Other Financial Institutions2
The total assets of OFIs increased by 24.74 per cent to ₦10,880.94 billion, representing
4.07 per cent of GDP, compared with 3.79 per cent at end-December 2023. The growth
was driven largely by increases in investments, net loans & advances and other assets.
Investments and net loans & advances rose by 49.41 per cent and 10.07 per cent to
₦3,777.35 billion and ₦4,038.28 billion, from ₦2,528.13 billion and ₦3,668.76 billion at endDecember 2023, respectively. Also, “Other assets” increased by 117.01 per cent to
₦765.78 billion compared with ₦352.88 billion at end-December 2023.
Further analysis showed that the increase in asset components was due to growth in other
liabilities, borrowings and deposits by 67.67, 26.93 and 26.72 per cent to ₦2,203.64 billion,
₦4,496.38 billion and ₦2,236.03 billion at end-June 2024, respectively. However, long-term
liabilities declined by 15.68 per cent to ₦717.44 billion, compared with ₦850.85 billion at
end-December 2023. The shareholders’ funds decreased by 1.26 per cent to ₦1,059.96
billion, owing largely to the reduction in reserves.
Notwithstanding the decline in the shareholders’ funds, most of the key OFI subsectors
remained sound, as the FSIs were largely within the prudential benchmarks.
Figure 3.7 OFIs Asset to GDP (Percentage Ratio)


2 Other Financial Institutions (OFIs) refers to Microfinance Banks, Development Finance Institutions, Primary Mortgage
Banks and Finance Companies.

Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
Dec-23
Jun-24
PER CENT (%)


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.8 Consolidated Balance Sheet of OFIs


Figure 3.9 Total Assets Structure of OFIs


3.2.1. Development Finance Institutions
Total assets of the Development Finance Institutions (DFIs) grew by 26.11 per cent to
₦6,877.89 billion, driven by increases in investments, net loans & advances and cash &
bank balances. Investments rose by 51.42 per cent to ₦3,533.11 billion, above the level
of ₦2,333.27 billion at end-December 2023. Net loans & advances and “Other Assets”
stood at ₦2,133.32 billion and ₦98.31 billion, indicating increases of 6.16 per cent and
14.98 per cent above their corresponding levels at end-December 2023, respectively.

End- Dec. 2023
DFI
PMB
FC
MFB

End- Jun. 2024
DFI
PMB
FC
MFB


N'Billions
Assets
Dec-23.
Jun-24


N'Billions
Liabilities
Dec-23
Jun-24


FINANCIAL STABILITY REPORT – JUNE 2024

The rise in assets was mainly due to increases in borrowings, deposits, and other liabilities.
Borrowings and deposits grew by 28.47 per cent and 5.90 per cent to ₦4,112.70 billion
and ₦749.80 billion above the levels of ₦3,201.19 billion and ₦707.99 billion at end-December 2023, respectively. Also, other liabilities amounted to ₦1,111.37 billion, an increase of 55.87 per cent above the level at end-December 2023. However, the shareholders’ funds declined by 2.50 per cent to ₦744.40 billion, compared with ₦763.49 billion in
the preceding period, owing to the decline in reserves.
Capital adequacy ratio (CAR) increased by 8.72 percentage points to 26.00 per cent, from
17.28 per cent at end-December 2023, while liquidity ratio (LR) increased by 35.28 percentage points to 236.97 per cent from 201.69 per cent at end-December 2023. However,
the non-performing loans ratio increased marginally by 0.15 percentage point to 19.53 per
cent, from 19.38 per cent at end-December 2023.

Figure 3.10 Consolidated Balance Sheet of DFIs


N'Billion
Assets
Dec-23
Jun-24


N'Billion
Liabilities
Dec-23
Jun-24


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.11 Total Assets of DFIs


Figure 3.12 Total Liabilities of DFIs


3.2.2. Primary Mortgage Banks
Total assets increased by 4.44 per cent to ₦594.48 billion, owing largely to increases in
placements, net loans & advances, other assets and fixed assets. Placements and net
loans & advances increased by 15.79 per cent and 1.26 per cent to ₦97.03 billion and
₦311.61 billion, from the levels of ₦83.80 billion and ₦307.72 billion, respectively, at endDecember 2023. Similarly, other assets and fixed assets increased by 6.59 per cent and
15.25 per cent, respectively, above their levels at end-December 2023.
Cash & Bank
Balances
0.42%
Placements
16.63%
Investment
42.78%
Net Loans &
Advances
36.85%
Other Assets
1.57%
Fixed Assets
1.75%
End- Dec. 2023
Cash & Bank
Balances
0.90%
Placements
14.06%
Investment
51.36%
Net Loans &
Advances
31.02%
Other Assets
1.43%
Fixed Assets
1.23%
End- Jun. 2024
Paid-up Capital
7.30%
Reserves
6.70%
Deposits
12.98%
Borrowings
58.70%
Due to Banks
0.02%
Other Liabilities
13.07%
Long-term
Liabilities
1.23%
End- Dec. 2023.
Paid-up Capital
5.91%
Reserves
4.91%
Deposits
10.90%
Borrowings
59.80%
Due to Banks
1.35%
Other Liabilities
16.16%
Long-term
Liabilities
0.97%
End- Jun. 2024


FINANCIAL STABILITY REPORT – JUNE 2024

The increase in assets was mainly due to the rise in deposits and other liabilities by 12.96
per cent and 3.02 per cent to ₦235.34 billion and ₦221.76 billion, from ₦208.34 billion and
₦215.25 billion at end-December 2023. However, shareholders’ funds decreased by 4.11
per cent to ₦48.43 billion at end-June 2024.
Investible funds declined to N45.36 billion from N49.78 billion, owing mainly to decrease in
bank balances of N2.26 billion and repayment of N5.98 billion due to other banks at endDecember 2023 (table 3.2).
Liquidity ratio rose by 9.96 percentage points to 56.69 per cent from 46.73 per cent at endDecember 2023, and above the regulatory minimum of 20.00 per cent. The NPL ratio also
improved to 17.43 per cent, from 20.12 per cent at end-December 2023, largely due to
improved loan recovery efforts. The CAR declined marginally by 0.68 percentage point to
12.53 per cent, from 13.21 per cent in the preceding half-year but remained above the
regulatory minimum of 10.00 per cent.

Figure 3.13 Composition of Assets of PMBs


End-Dec. 2023
Cash & Short-Term Funds
Investment
Net Loans & Advances
Other Assets
Fixed Assets

End-Jun. 2024
Cash & Short-Term Funds
Investment
Net Loans & Advances


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.14 Composition of Liabilities of PMBS


Table 3.1: Financial Highlights of PMBs

End-December

(N’ billion)
End-June 2024
(N’ billion)
Change
(N’ billion)
Change
%
Total Assets

Net Loans and Advances

Placements

Other Assets

Fixed Assets

Reserves

Deposit liabilities

Other liabilities

Paid-up Capital

Shareholders’ funds

Capital Adequacy Ratio (%)

Liquidity Ratio (%)

Non-performing Loans (%)


End- Dec. 2023
Paid-up Capital
Reserves
Deposits
Due to Banks
Long-term Liabilities
Other Liabilities

End- Jun. 2024
Paid-up Capital
Reserves
Deposits
Due to Banks
Long-term Liabilities
Other Liabilities


FINANCIAL STABILITY REPORT – JUNE 2024

Table 3.2: Sources and Utilisation of Investible Funds
Items
Source (N’million)
Utilization (N’million)
Cash

Bank Balances
2,260

Placements

13,228
Investments

2,210
Loans And Advances

3,886
Other Assets

4,413
Fixed Assets

3,391
Paid-Up Capital

11,582
Reserves
9,590

Deposits
26,998

Due To Other Banks

5,984
Other Liabilities
6,509

Long-term Liabilities

Total
45,357
45,357
[[
3.2.3. Finance Companies
Total assets of Finance Companies grew by 10.20 per cent to ₦613.17 billion from the level
of ₦556.43 billion recorded in the preceding period, owing largely to increases in net loans
& advances, investments, and bank balances. Net loans & advances rose by 16.64 per
cent to ₦337.03 billion from ₦288.94 billion. Investments grew by 51.30 per cent to ₦41.38
billion from ₦27.35 billion, while balances with banks increased by 10.54 per cent to ₦46.03
billion, above the level of ₦41.64 billion reported at end-December 2023.

Similarly, borrowings and other liabilities grew by 12.42 and 7.84 per cent to ₦383.68 billion
and ₦171.38 billion, compared with ₦341.29 billion and ₦158.92 billion respectively, at
end-December 2023. Shareholders’ funds increased by 5.48 per cent to ₦57.63 billion,
owing largely to appropriation to reserves.

Investible funds amounted to ₦68.00 billion, sourced mainly from borrowings of ₦42.39
billion, other liabilities of ₦12.46 billion and other assets of ₦4.56 billion. The funds were
applied mainly to net loans & advances, investments, and bank balances of ₦48.09 billion,
₦14.03 billion and ₦4.40 billion, respectively.

The NPL ratio of finance companies improved to 10.82 per cent from 12.61 per cent in the
preceding period and was below the maximum regulatory limit of 20.00 per cent. This outcome reflected an improvement in asset quality and loan recovery efforts. However, the
CAR decreased slightly by 0.61 percentage point to 9.07 per cent from 9.68 per cent and
was below the regulatory threshold of 12.50 per cent.


FINANCIAL STABILITY REPORT – JUNE 2024

Table 3.3: Highlights of Financial Position of Finance Companies


End-Dec 2023

(N’ billion)
End-Jun

(N’ billion)
Change
(N’ billion)
%
Change

Total Assets

Cash in Vault

Balances with Banks

Net Loans and Advances

Investments

Placements

Fixed Assets

Borrowings

Other Liabilities

Shareholders’ Funds

Paid-up Capital

Reserves

Capital Adequacy Ratio (%)

Non-performing Loans (%)


Figure 3.15 Consolidated Balance Sheet

Assets
Dec-23
Jun-24

Liabilities
Dec-23
Jun-24


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.16 Composition of Assets


Figure 3.17 Composition of Liabilities


Table 3.4: Sources and Utilisation of Investible Funds
₦’m
₦’m
Source
Utilization
Cash
1,316

Bank Balances

4,396
Placements

Investments

14,030
Net Loans and Advances


End- Dec. 2023
Cash & Bank Balances
Placements
Investments
Net Loans & Advances
Other Assets
Fixed Assets

End-Jun 2024
Cash & Bank Balances
Placements
Investments
Net Loans & Advances
Other Assets
Fixed Assets

End- Dec. 2023
Paid-up Capital
Reserves
Borrowings
Long-term Liabilities
Other Liabilities

End- Jun. 2024
Paid-up Capital
Reserves
Borrowings
Long-term Liabilities
Other Liabilities


FINANCIAL STABILITY REPORT – JUNE 2024

Other Assets
4,565

Fixed Assets
3,548

Paid-Up Capital

Reserves
3,364

Borrowings
42,391

Other Liabilities
12,463

Long term Liabilities

1,112
Total
67,995
67,995

3.2.4. Microfinance Banks
Total assets rose by 30.41 per cent to ₦2,795.40 billion, owing largely to increases in other
assets, net loans & advances and investments. Other assets and investments grew by
324.76 per cent and 29.29 per cent to ₦523.49 billion and ₦146.31 billion, respectively,
above their levels in the second half of 2023. Net loans & advances also increased by 18.23
per cent to ₦1,256.32 billion.
Growth in total liabilities was driven mainly by paid-up capital, deposits and other liabilities,
which rose by 16.23 per cent, 47.48 per cent and 90.50 per cent to ₦164.54 billion,
₦1,250.89 billion and ₦699.13 billion, respectively, above their levels in the second half of
2023. The substantial growth in deposits was mainly driven by the increased adoption of
electronic channels by some MFBs. Shareholders’ funds also grew by 2.19 per cent to
₦211.49 billion, at end-June 2024, owing mainly to new capital injections.
Investible funds, totalling ₦788.57 billion, were mainly sourced from deposits of ₦402.74
billion, paid-up capital of ₦22.98 billion, and other liabilities of ₦332.14 billion. The funds
were applied mainly to other assets, net loans & advances, and fixed assets by ₦400.24
billion, ₦193.73 billion, and ₦28.87 billion, respectively.
The LR at 65.46 per cent was above the minimum regulatory requirement of 20.00 per cent,
although it reflected a decline from 95.11 per cent in the preceding period. The CAR declined to 9.96 per cent from 14.00 per cent, and was slightly below the minimum regulatory
requirement of 10.00 per cent.
The Portfolio-At-Risk (PAR) improved to 12.25 per cent from 14.79 per cent at end-December 2023 but exceeded the maximum regulatory threshold of 5.00 per cent.


FINANCIAL STABILITY REPORT – JUNE 2024

Table 3.5: Highlights of Financial Position of Microfinance Banks


End-December

(N’ Billion)
End-June 2024
(N’ Billion)
Change
(N’ Billion)
% Change

Total Assets

Investments

Net Loans and Advances

Other Assets

Fixed Assets

Paid up Capital

Reserves

Shareholders’ Funds

Deposits

Takings from Other Banks

Long Term Loans/On-lending

Other Liabilities

Capital Adequacy Ratio (%)

Liquidity Ratio (%)

Portfolio-at-Risk (PAR) (%)


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.18 Balance Sheet

Figure 3.19 Composition of Assets


Cash & Bank
Balances
19.04%
Placements
15.63%
Investment
5.28%
Net Loans &
Advances
49.57%
Other Assets
5.75%
Fixed Assets
4.73%
End- Dec. 2023
Cash &
Bank
Balances
14.35%
Placemen
ts
12.09%
Investme
nt
5.23%
Net Loans
&
Advances
44.94%
Other
Assets
18.73%
Fixed
Assets
4.66%
End- Jun. 2024

1,000
1,200
1,400
Assets
Dec-23
Jun-24

1,000
1,200
1,400
Liabilities
Dec-23
Jun-24


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.20 Composition of Liabilities


Table 3.6: Sources and Utilisation of Investible Funds
₦’m
₦’m
Source
Utilisation
Cash
22,435

Bank Balances

15,415
Placements

2,885
Investments

33,144
Loans And Advances

193,733
Other Assets

400,244
Fixed Assets

28,869
Paid-up Capital
22,976

Reserves

18,448
Deposits
402,736

Borrowings


Due To Other Banks

95,676
Other Liabilities
332,138

Long-term Liabilities
8,129

Total
788,414
788,414

3.2.5. Maturity Structure of MFB Loans & Advances and Deposit Liabilities
The structure of loans & advances and deposit liabilities was mainly short-term. Short-term
loans and advances accounted for 62.59 per cent of total loans, compared with 57.47 per
cent at end-December 2023. Similarly, deposits of less than one year constituted 75.52 per
cent of the total deposit liabilities, compared with 86.48 per cent at end-December 2023.

Paid-up
Capital,
6.60%
Reserves,
3.05%
Deposits,
39.57%
Takings
from Other
Banks,
7.20%
Long-term
Liabilities,
26.46%
Other
Liabilities,
17.12%
End- Dec. 2023
Paid-up
Capital,
5.89%
Reserves,
1.68%
Deposits,
44.75%
Takings
from Other
Banks,
2.10%
Long-term
Liabilities,
20.58%
Other
Liabilities,
25.01%
End- Jun. 2024


FINANCIAL STABILITY REPORT – JUNE 2024

Table 3.7: Maturity Structure of MFBs Loans and Advances and Deposit Liabilities
End-Dec 2023
End-Jun 2024
Tenor/Period
Loans and Advances
(%)
Deposits (%)
Loans and Advances (%)
Deposits (%)
0-30 Days

31-60 Days

61-90 Days

91-180 Days

181-360 Days

Short-Term

Above 360 Days

Total


3.2.6. Other Developments in the OFI Sub-sector
In the review period, the following additional developments were recorded in the OFI subsector:
• Twenty-seven PMBs commenced the profiling of customers' account details on the
NIBSS-ICAD platform to facilitate the integration of the PMBs on the CRMS-GSI
platform and improve loan recovery.
• All FCs were required to apply to the Bank for a change of their names to end with
“Finance Company Limited” or “Finance Company Plc”, to streamline the name format for FCs and avoid mischaracterisation.
• The Bank deployed an electronic platform for the submission and processing of licensing and other requests.
3.2.7. Asset Management Corporation of Nigeria
During the review period, the Asset Management Corporation of Nigeria (AMCON)
made cash recoveries of ₦56.41 billion, compared with ₦125.20 billion in the preceding
half, in addition to the earned investment income of ₦9.51 billion.
The carrying value of AMCON’s liabilities declined marginally to N5,504.39 billion at
end-June 2024, from ₦5,574.59 billion at end-December 2023, representing a decrease
of 1.26 per cent. The principal value of the AMCON Note in the sum of ₦3,901.59 billion
was rolled over for another nine years, commencing December 27, 2023.
The Corporation’s total assets, net of impairment, increased by 2.18 per cent to
₦1,104.00 billion at end-June 2024 from ₦1,080.47 billion at end-December 2023.
Contributions by banks to the Banking Sector Resolution Cost Fund (BSRCF) in the
first half of 2024 amounted to ₦570.44 billion, compared with N 416.99 billion at endDecember 2023 and were utilised by AMCON to settle its obligations.


FINANCIAL STABILITY REPORT – JUNE 2024

The cumulative recovery by AMCON since inception amounted to ₦1,970.86 billion,
comprising cash recoveries of ₦1,259.56 billion, other collections (property sale, share
sales, rental income, dividend income, sale of bridge banks and re-investment income)
of ₦590.43 billion, and asset forfeiture of ₦120.87 billion.

3.3. The Banking Industry Stress Tests
The Bank continued to deploy micro and macroprudential tools to identify and assess
vulnerabilities in the financial system and implement suitable regulatory measures. In
this regard, top-down solvency and liquidity stress tests of the banking industry (excluding the OFIs), were conducted to assess its resilience (Box 4).

3.3.1. Baseline Position
The baseline CAR, LR and NPL ratio in the period under review were 12.52, 50.02 and
3.90 per cent, compared with 13.13 per cent, 39.89 per cent and 4.04 per cent, respectively,
in the preceding period. Return on Assets (ROA) and Return on Equity (ROE) stood at 3.47
and 59.81 per cent, compared with 3.16 per cent and 49.04 per cent, respectively, in the
second half of 2023.

Table 3.8: Banking Industry Baseline Indicators

CAR (%)
LR (%)
NPLs (%)
ROA (%)
ROE (%)
a. Jun 2023

b. Dec 2023

c. Jun 2024

Percentage Points Change (c –
b)


Figure 3.21 Banking Industry CAR


Dec '19
Jun '20
Dec '20
Jun '21
Dec '21
Jun '22
Dec '22
Jun '23
Dec '23
Jun '24
Per Cent


FINANCIAL STABILITY REPORT – JUNE 2024

3.3.1.1.
Credit Default Stress Test
The outcome of the stress test showed that with a shock of 50.00 per cent increase in NPLs,
the banking industry remained resilient and above the regulatory CAR of 10.00 per cent.

Table 3.9 Credit Default Stress Test

3.3.1.2.
Credit Concentration Stress Test
A breakdown of the CMNB’s total credit by sector at end-June 2024 showed that the Oil
and Gas sector had the highest proportion of the total credit exposure, accounting for 29.79
per cent, followed by manufacturing with 16.32 per cent.

Table 3.10 Credit Exposure by Sectors
S/No SECTOR
End-Jun 2024
% to Total Credit

Oil & Gas
16,734.32
29.79

Manufacturing
9,170.15
16.32

General
5,522.40
9.83

Finance & Insurance
5,195.76
9.25

General Commerce
3,802.11
6.77

Government
2,948.83
5.25

Shocks
December 2023
CAR (%)
June 2024
CAR (%)
Baseline
13.13
12.52
10% increase in NPLs
12.81
12.25
15% increase in NPLs
12.65
12.12
20% increase in NPLs
12.49
11.98
30% increase in NPLs
12.16
11.71
50% increase in NPLs
11.50
11.17


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.22 Credit Exposure by Sectors


The outcome of the sectoral credit concentration stress tests showed that a shock of “20.00
per cent of the Oil & Gas exposures classified as doubtful” could reduce CAR to 10.41 per
cent, while a shock of “20.00 per cent classified as lost” could decrease CAR to 8.20 per
cent.
Similarly, obligor credit concentration shocks of the five largest corporate credit facilities
shifting from “performing loans to sub-standard” (Scenario 1), “sub-standard to doubtful”
(Scenario 2) and “doubtful to lost” (Scenario 3) could result in banking industry CAR declining to 12.15, 11.59 and 10.65 per cent, respectively. These results reflected the banking
industry's resilience to risks from sectoral or obligor credit concentrations.

Table 3.11 Obligor Credit Concentration Stress Tests

3.3.1.3.
Climate Risk Stress Test
The test showed that the banking industry solvency was resilient under the mild scenario,
as the CAR remained above the regulatory threshold at 10.91 per cent. However, under

Oil & Gas
Manufacturing
Governments
General
General Commerce
Finance and Insurance
Scenarios
Dec 2023
CAR (%)
Jun 2024
CAR (%)
Baseline
13.13
12.52
Scenario 1
Five largest corporate credit facilities shifted from performing to sub-standard (10% provision)
12.64
12.15
Scenario 2
Five largest corporate credit facilities shifted from sub-standard to doubtful
(50% provision)
11.91
11.59
Scenario 3
Five largest corporate credit facilities shifted from doubtful to lost (100%
provision)
10.65
10.65


FINANCIAL STABILITY REPORT – JUNE 2024

the moderate and severe scenarios, the CAR fell below the 10.00 per cent threshold to 8.75
and 5.46 per cent, respectively.
Figure 3.23 Climate Risk Stress Test: Impact on CAR


3.3.2. Liquidity Stress Test
The test revealed that after a one-day run scenario, the LR of the CMNBs could decline to
35.19 per cent from the 50.02 per cent baseline position, compared with a decline of 31.48
per cent from 39.98 per cent in the preceding half-year. Similarly, under the 5- and 30-day
run scenarios, the LR could decline to 6.56 and -2.66 per cent, respectively. These would
result in liquidity shortfalls of ₦8,260.53 billion and ₦10,203.52 billion, compared with
₦7,345.10 billion and ₦9,055.58 billion, at end-December 2023, respectively. However,
there were sufficient CRR balances of ₦20,422.32 billion to mitigate any shortfall in CMNBs’
liquidity.

Figure 3.24 Liquidity Stress Test


Mild
Moderate
Severe
Per cent
Baseline CAR
Post-Shock CAR


Pre- shock
After Day 1
After Day 2
After Day 3
After Day 4
After Day 5
After Cum Day 30
Dec-22
Jun-23
Dec-23
Jun-24


FINANCIAL STABILITY REPORT – JUNE 2024

pTable 3.12: Implied Cash Flow Liquidity Stress Test Results

No. of Banks with LR <
30%
LR (%)

Dec 2023
Jun 2024
Dec 2023
Shortfall* to
30% LR threshold
(N’ billion)
Jun 2024
Shortfall to 30%
LR threshold
(N’ billion)
Day 1


Day 2


Day 3


Day 4


Day 5


Day 30


*( ) denotes liquidity above threshold

3.3.2.1.
Maturity Mismatch
The assets and liabilities baseline position showed a mismatch of ₦17,651.62 billion assets
over liabilities, although the shorter end of the market (≤90-day bucket) was adequately
funded.
The test result under Descriptive Maturity Mismatch (Test 1) revealed that the CMNBs were
adequately funded, except for the “above 3 years” bucket. Under Static Rollover Risk (Test
2) and Dynamic Rollover Risk (Test 3), there was a mismatch of ₦25,826.10 billion and
N29,498.19 billion, respectively. Relative to the end-December 2023 tests, these reflected
increases of ₦8,186.97 billion and ₦9,677.31 billion under Test 2B and Test 2C scenarios,
respectively.
Table 3.13: Maturity Profile of Assets and Liabilities
Bucket
Liabilities
Assets
Mismatch
Cumulative Mismatch
₦’ billion
≤30 days

31-90 days

91-180 days

181-365 days

1-3 years

>3 years

Total
99,865.57
117,517.19


FINANCIAL STABILITY REPORT – JUNE 2024

Table 3.14: Stress Test Results for Maturity Mismatch

Test 1
Descriptive Maturity
Mismatch.
(No consideration of rollover)
Test 2
Static Rollover Risk Analysis.
(No possibility to close liquidity gaps in other
buckets)
Test 3
Dynamic Rollover Risk test.
(Free assets used to close liquidity gaps in other buckets)

₦’ billion
No of
banks with
mismatch
N’ billion
No of
banks
with mismatch
N’ billion
No of banks
with mismatch
≤30 days
32,682.52

17,576.04

(657.10)

31-90 days
13,981.59

(280.25

(1,397.11)

91180days
8,634.72

(4,142.48)

(1,388.26)

181365days
5,910.99

(7,219.62)

(3,019.96)

1-3 Years
4,443.84

(8,882.93)

(4,771.21)

Above

years
(10,891.16)

(22,876.86)

(18,264.54)

Total
54,762.48

(25,826.10)
(29,498.19)

3.3.2.2.
Contagion Risk Analysis
The contagion risk via inter-bank placements and takings increased as total exposure from
placements and takings rose by 49.96 per cent to ₦1,663.83 billion, compared to ₦1,109.48
billion exposure at end-December 2023. Further analysis revealed that eight out of 20
banks accounted for ₦1,190.73 billion of total placements, and another eight accounted for
₦1,481.19 billion of total takings. However, the exposures did not significantly threaten financial system stability, as all placements were collateralised.


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.25 Network Analysis based on Interbank Exposures


3.4. Supervision of Banks and Other Financial Institutions
The Bank sustained its off-site surveillance and onsite examinations of regulated financial
institutions in the first half of 2024.

3.4.1. Spot Checks and Special Investigations
During the review period, the following activities were carried out:
• Special investigations to ascertain banks' compliance with the cash withdrawal limits. The outcome revealed some irregularities and recommendations were made to
address the lapses.

• Spot checks on selected banks to assess compliance with the Targeted Financial
Sanctions (TFS) related to terrorism and proliferation financing as well as the
procedure for monitoring and reporting suspicious transactions. The outcome revealed that the banks had appropriate policies and procedures on TFS and for monitoring and reporting of suspicious transactions. It also showed that the sampled
banks largely complied with the TFS regulations and deployed tools for effective
monitoring of transactions.
Node colour representation
Blue = Placement only
Purple = Net Placement
Pink = Takings only
Magenta = Net Takings


FINANCIAL STABILITY REPORT – JUNE 2024

3.4.2. Routine and Target Examination
3.4.2.1.
Risk Assets Assessment Examination
The joint CBN/NDIC Risk Assets Assessment Examination was conducted to evaluate the
quality of the banks’ assets and adequacy of loan loss provisions for the year ended 2023.
The reports were considered in granting no objection for the publication of banks’ audited
financial statements.
3.4.2.2.
Risk-Based Supervision
The risk-based examination of three credit bureaux and AMCON was conducted in the first
half of 2024.
3.4.2.3.
AML/CFT/CPF Examination
The Bank conducted AML/CFT/CPF risk-based examination of 31 banks to ensure that the
banking system was not used as conduits for money laundering, terrorism financing and
the financing of proliferation of weapons of mass destruction.
3.4.2.4.
Consolidated Supervision
The consolidated examination of two financial holding companies was conducted in collaboration with relevant financial services regulators. A few observations relating to the impact
of corporate governance on the non-bank subsidiaries of the financial holding companies
were made and appropriate regulatory measures were taken. On a consolidated basis, the
institutions remained resilient and stable.

3.4.2.5.
Risk-Based Cybersecurity Review
The Bank, in collaboration with the NDIC, conducted on-site validation of the cybersecurity
self-assessment of 16 CMNBs and five Payment Service Banks. The objectives of the review were to assess the interdependencies between CMNBs and third-party technology
service providers and the adequacy of cybersecurity controls to mitigate evolving threats.
Supervisory letters were issued with recommendations for prompt corrective actions.

3.4.2.6.
Foreign Exchange Examinations
The foreign exchange (FX) examination of the 29 Authorised Dealer Banks (ADBs) comprising 25 commercial banks and four merchant banks, was conducted to ascertain compliance with extant foreign exchange rules and regulations, analysis of FX inflows and outflows from major sources and utilisation. The examination revealed some infractions and
appropriate regulatory measures were taken.
Furthermore, in a bid to address foreign currency speculation, the Bank issued a circular,
“Harmonisation of Reporting Requirements for Foreign Currency Exposures of Banks”, to
ensure that banks’ Net Open Positions did not exceed 20.00 per cent (short) or 0.00 per
cent (long) of shareholders’ funds unimpaired by losses.


FINANCIAL STABILITY REPORT – JUNE 2024

3.4.2.7.
Risk-Based Supervision of Market Conduct
A pilot examination was conducted on 12 financial institutions, comprising eight CMNBs,
three MFBs and one Mobile Money Operator (MMO) to determine consumer risks inherent
in their significant activities and the effectiveness of controls in the institutions. The outcome
of the examination placed the institutions within the risk rating of Low and Moderate.
3.4.2.8.
Domestic Systemically Important Banks
During the review period, the five banks designated as Domestic Systemically Important
Banks (D-SIBs) maintained their status and continued to be subjected to enhanced supervision, given the significant impact the failure of any of the institutions could have on the
overall financial system.
The D-SIBs remained compliant with prudential requirements and accounted for 63.74 per
cent, 63.36 per cent and 60.77 per cent of industry total assets, deposits and aggregate
credit, respectively.
3.4.3. Supervision of Payment Service Banks
The Bank conducted a risk-based examination of two PSBs. The examination revealed
some lapses and recommendations were made to address them.
The total assets of the PSBs stood at ₦139.47 billion, representing 0.10 per cent of total
banking industry assets, compared with 0.23 per cent in the preceding half year. Total deposit liabilities stood at ₦37.68 billion, representing 0.04 per cent of the industry deposits
of ₦88,167.46 billion. The total liabilities of the PSBs were ₦115.40 billion at end-June,
2024, compared with ₦101.84 billion at end-December 2023.

3.4.3.1.
Oversight & Compliance Assessment of Payments Service Providers
The Bank conducted routine examinations of 21 licensed PSPs to ascertain their risk management practices and compliance with extant regulations. The examinations revealed
some infractions and appropriate regulatory measures were taken.
s
3.4.3.2.
Supervision of Other Financial Institutions
The Bank examined 959 OFIs in the review period. The types and outcomes of the examinations were as follows:
i.
AML/CFT/CPF thematic examination of 98 MFBs to evaluate the effectiveness of
AML/CFT/CPF controls on Politically Exposed Persons (PEPs), TFS, and Beneficial
Ownership (BO). The MFBs with identified infractions were sanctioned in line with
the existing CBN AML/CFT/CPF (Administrative Sanctions) Regulation 2023.

ii.
The routine AML/CFT/CPF examination of 500 BDCs, seven DFIs and 43 Significantly Important Other Financial Institutions (SIOFIs) to assess their compliance with
the extant money laundering and terrorism laws, to mitigate ML/TF risks. The examination revealed some lapses and the affected OFIs were subsequently sanctioned.


FINANCIAL STABILITY REPORT – JUNE 2024

iii.
The routine RBS examination of 43 SIOFIs revealed various infractions of extant
regulations. Consequently, Supervisory Letters were issued to the affected institutions, with appropriate regulatory directives.

iv.
Spot-checks were conducted on 311 BDCs to assess compliance with regulations
in the sales of Personal Travel Allowance and Business Travel Allowance. The report revealed substantial compliance with extant regulations, but a few infractions,
such as multiple funding and ownership of BDCs, were identified and appropriate
measures were taken to ensure compliance.

3.4.4. Cross Border Supervision of Nigerian Banks
The Bank conducted RBS and AML/CFT/CPF examinations of offshore banking subsidiaries of Nigerian banks in Ghana and The Gambia, to address supervisory concerns, validate
returns rendered by the parent banks and update the risk profiles of the subsidiaries.
The examinations revealed issues, such as non-compliance with requirements for board
composition and quality of subsidiaries’ earnings. The recommended remedial actions were
communicated to the parents of affected banks.
3.5. Supervisory Collaboration
The Bank sustained its collaborative engagements on cyber-security, cross border supervision and other emerging issues. The collaborations included participation in the following
meetings:
• Community of African Banking Supervisors (CABS) meeting in Lusaka, Zambia. The
meeting discussed major macroeconomic challenges, such as weak output growth,
high inflation, currency depreciation and other financial stability concerns, and made
appropriate recommendations.

• The 19th Basel Committee on Banking Supervision-Financial Stability Institute high
level meeting for Africa in Cape Town, South Africa, discussed and made recommendations on strategies for strengthening financial sector supervision in the region.

• The 48th & 49th College of Supervisors of the West African Monetary Zone
(CSWAMZ) meetings in Abuja, Nigeria and Accra, Ghana, respectively. The meetings reviewed banking industry developments across the Zone with a focus on crossborder supervision, Basel standards implementation, Expected Credit Loss (ECL)
impairment models, and capacity building.


3.6. Credit Reporting and Supervision
3.6.1. Credit Risk Management System
The Credit Risk Management System (CRMS) database continued to serve as a veritable
source of credit information and an additional credit risk management tool for the banking
industry.


FINANCIAL STABILITY REPORT – JUNE 2024

The cumulative number of credit facilities on the CRMS database stood at 61,533,958,
comprising 60,145,323 individual and 1,388,635 non-individual borrowers, reflecting an increase of 15.41 per cent above the level of 1,236,599 recorded in the preceding half-year.
The total number of facilities with outstanding balances stood at 9,560,114, comprising
9,389,879 individuals and 170,235 non-individuals at end-June 2024, indicating an increase of 32.85 per cent from the level of 7,196,393 recorded at end-December 2023.

Table 3.15: Credit Risk Management System Statistics
Borrowers from the Banking Sector (Commercial, Merchant and Non-Interest Banks)
Description
End-Dec 2023
End-Jun 2024

Absolute
Increase/decrease
%
Change
* Total No. of Credit/facilities reported on
the CRMS:

Individuals

Non-Individuals

* Total No. of Outstanding Credit facilities
on the CRMS:

Individuals

Non-Individuals

* The figures include borrowers with multiple loans and/or credit lines

3.6.2. Credit Bureaux
The licensed private credit bureaux remained three at end-June 2024. The average number
of uniquely identified credit records in the database of the credit bureaux stood at 105.68
million, a decrease of 51.63 million (or 10.87 per cent) from the level of 157.31 million at
end-December 2023. The decrease was attributable mainly to a fall in credit demand in the
banking sector owing to high borrowing cost. Also, the average number of subscribers in
the database of the credit bureaux increased to 1,596, from 1,540 in the second half of
2023, an increase of 56.33 or 3.66 per cent.


FINANCIAL STABILITY REPORT – JUNE 2024

Table 3.16: Credit Bureaux Statistics
S/N
Description
CRC Credit
Bureau Ltd
CR Services
Credit
Bureau Plc
First Central
Credit
Bureau Ltd
CRC Credit
Bureau Ltd
CR Services
Credit
Bureau Plc
First Central Credit
Bureau Ltd


End-Dec 2023
End-Jun 2024

Number of credit
records


Value of Credit Facilities (N’Tn)
N67.90
N69.5
N31.33
N88.34
N78.52
N47.95

Number of borrowers


Number of subscribers

[
s

3.7. Other Developments
3.7.1. Basel II Implementation
The Bank commenced the Supervisory Review and Evaluation Process (SREP) for 16
banks based on the Internal Capital Adequacy Assessment Process (ICAAP) which identified an average of 15 Pillar II risks, in addition to the Pillar I risks of credit, market and
operational. This process was in line with the requirements of Pillar 2 of Basel II and the
Guidelines on Supervisory Review Process of ICAAP.
3.7.2. Financial Services Regulation Coordinating Committee
During the review period, the Financial Services Regulation Coordinating Committee
(FSRCC) launched a quarterly digital newsletter, Financial Anchor, to provide stakeholders
with accurate and timely information on financial services regulation and activities of the
FSRCC.

3.7.3. Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing
The Bank strengthened the AML/CFT/CPF regime to address the deficiencies identified in
the Mutual Evaluation Report (MER) for Nigeria as well as implement the Action Plan developed by the Financial Action Task Force (FATF) International Cooperation Review
Group (ICRG) as part of the requirements for monitoring countries on the FATF grey list. In
its efforts to secure the exit of the country from the FATF grey list, the Bank undertook the
following:
1. Coordinated and conducted ML/TF/PF sectoral risk assessment of banks and other
financial institutions.
2. Organised Outreach/Sensitisation workshop on ML/TF/PF typologies for financial
institutions.


FINANCIAL STABILITY REPORT – JUNE 2024

3. In collaboration with the World Bank, organised a training workshop on
AML/CFT/CPF Risk-Based Supervision for Examiners.
4. In collaboration with His Majesty’s Treasury (HM Treasury), organised training for
Examiners on processes for imposition of sanctions on licensed financial institutions.

3.7.4. Sectoral Risk Assessment
The Bank conducted its maiden Sectoral Risk Assessment (SRA) in line with the FATF
standards to strengthen the RBS of financial institutions under its purview. The assessment
identified some ML/TF/PF risks and gaps in existing systems and controls in CMNBs, OFIs,
PSBs, PSPs, and International Money Transfer Operators (IMTOs). The need to develop a
National AML/CFT/CPF strategy was also identified.
The SRA report recommended that the Bank should strengthen both offsite and onsite supervision to enhance FIs’ compliance with AML/CFT/CPF requirements; enhance collaboration with stakeholders to promote the understanding of AML/CFT/CPF risks through targeted outreach and regular engagement. The report further recommended the need for FIs
to strengthen Customer Due Diligence (CDD) procedures, transaction monitoring and reporting of suspicious transactions.

3.7.5. Guidelines on the Operation of Bank Accounts for Virtual Asset Service Providers
The Bank issued Guidelines on the Operations of Bank Accounts for Virtual Asset Service
Providers (VASPs) to all banks and other financial institutions. The Guidelines provide a
regulated environment for virtual asset transactions, sets minimum standards for banking
relationships with VASPs, and provides guidance on the operations of accounts by eligible
entities.

3.7.6. Banking Sector Recapitalisation
The Bank, in its effort to ensure the emergence of stronger, healthier and more resilient
banks to support the achievement of a USD 1 trillion economy by the year 2030, directed
banks to increase their minimum paid-in common equity capital according to their licence
category and authorisation within a two-year timeframe ending March 31, 2026.

Box 1: Review of Minimum Capital Requirements for Commercial, Merchant and NonInterest Banks in Nigeria
The Bank on March 28, 2024 issued a circular announcing an upward review of the
Minimum Capital Requirements for Commercial, Merchant and Non-Interest Banks in
Nigeria in line with Section 9 of the Banks and Other Financial Institutions Act (BOFIA)
2020. This was aimed at engendering a more resilient, safe and sound financial system
that would support the emergence of the FGN’s targeted one trillion-dollar economy by
2030. The review also became necessary to strengthen and reposition the banking


FINANCIAL STABILITY REPORT – JUNE 2024

system since the last banking consolidation exercise in 2005. The circular stipulated
March 31, 2026 as the deadline for compliance.

Category
Minimum Capital Requirements
₦’ Billion
Current
New
International commercial banks

National commercial banks

Regional commercial banks

National merchant banks

National non-interest banks

Regional non-interest banks

Other details of the circular include:
Options for Meeting Requirements: Banks may raise capital through private placement,
rights issue, public subscription, mergers and acquisitions, or adjusting their licence
authorisation (upgrade/downgrade).
Timeline: Existing banks must meet the new capital requirements within 24 months,
starting from April 1, 2024, and ending on March 31, 2026. New banks must meet the
requirements upon application.
Compliance: Banks must submit an implementation plan to the CBN by April 30, 2024.
The CBN will monitor compliance and enforce the requirements within the stipulated
timeline.
For Existing and New Banks: For existing banks, the minimum capital shall include
paid-up capital and share premium only and must adhere to the minimum capital adequacy ratio (CAR). New banks must meet the paid-up capital requirement directly.


3.7.7. Reform of Bureaux De Change
The Bank issued the Revised BDC Guidelines which introduced new licensing requirements and categories of BDCs, as well as revised the permissible activities, financial, corporate governance and AML/CFT/CPF requirements.


FINANCIAL STABILITY REPORT – JUNE 2024

3.8. Market Conduct Assessment
3.8.1. Market Abuse and Misconduct
The Bank convened a consumer protection forum for FIs in collaboration with the Innovations for Poverty Action (IPA). The Forum, themed “Feedback to Foresight: Proactive Consumer Protection in Financial Services”, provided a platform for operators to explore strategies to mitigate consumer risks and boost consumer confidence in the financial system.
The Forum recommended the extension of Fraud Helpdesks to OFIs and investment in
chat-bot technologies to simplify information dissemination for product pricing and introduction of gender-focused initiatives for financial access.
3.8.2. Usage of Digital Financial Services
The Bank, in collaboration with the IPA conducted a survey on the use of Digital Financial
Services (DFS) to enhance consumer-centric policy formulation. The survey covered the
six geo-political zones of Nigeria and identified most common challenges faced by DFS
consumers. These include service downtime, fraud, overcharging, time-consuming and
costly redress process as well as difficulties in digital loan repayment. The feedback recommended regular financial literacy programmes, the provision of more inclusive DFS
products, increased oversight of DFS providers and provision of efficient redress mechanisms.

3.8.3. Complaints Management and Resolution
The total number of complaints received increased to 16,527, from the 11,274 recorded in
the second half of 2023, indicating an increase of 46.59 per cent. This substantial increase
was due largely to the deployment of an electronic form for complaints escalation, and
enhanced adoption of electronic channels for transactions. Of the total complaints, 76.77
per cent were against banks while 23.22 per cent were against OFIs.

In terms of categories, fraud-related complaints were the highest, accounting for 41.49 per
cent of the total; followed by Electronic/Cards, 32.57 per cent; Account Management, 22.38
per cent; Excess Charges, 0.49 per cent and Others, 3.07 per cent.

A total of 14,743 complaints were resolved/closed, indicating an increase of 116.71 per
cent above the 6,803 complaints resolved/closed in the preceding half-year. Total claims
amounted to ₦12.60 billion and US$1,054,521.04, as against ₦8.39 billion and
US$972,072.02, in the preceding period. The sums of ₦5.47 billion and US$665,126.33
were refunded, compared with ₦3.13 billion and US$49,614.72 in the second half of 2023.


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.26 Number of Complaints Received


Figure 3.27 Complaints Received


Figure 3.28 Number and Percentage of Complaints by Category

ELECTRONIC/CARDS 33%
FRAUD 41%
ACCOUNT MGT 22%
EXCESS CHARGES 1%
OTHERS 3%
End-June 2024


ELECTRONIC/CARDS
FRAUD
ACCOUNT MGT
EXCESS CHARGES
OTHERS
Per cent
Number
Category
July to December 2023
Percentage

July- Dec 2023
Jan - Jun 2024


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.29 Complaints Resolved or Closed

Figure 3.30 Complaints Resolved or Closed


ELECTRONIC/CARDS 41%
FRAUD 46%
ACCOUNT
MGT 11%
EXCESS CHARGES 2%
OTHERS 0%
End-June 2024
ELECTRONIC/CARDS
FRAUD
ACCOUNT MGT
EXCESS CHARGES
OTHERS

Electronic/Cards
Fraud
Account Mgt
Excess Charges
Others

5,986
6,856
1,619

End-Dec 2023
End-Jun 2024


FINANCIAL STABILITY REPORT – JUNE 2024

Figure 3.31 Distribution of Complaints Resolved or Closed


3.9. Capacity Building Programme
A total of 210 staff of MFBs completed the Microfinance Certification Programme of the
Chartered Institute of Bankers of Nigeria (CIBN). This increased the total number of certified
staff to 8,955 from 8,745 at end-December 2023.
The Bank, in collaboration with some law enforcement agencies (LEAs), conducted training
on money laundering typologies, such as proceeds of corruption, illicit drug trafficking, fraud
and terrorism financing. The training was attended by 170 participants drawn from banks,
PSPs, and IMTOs.

JULY
AUGUST
SEPTEMBER
OCTOBER
NOVEMBER
DECEMBER
NO. OF CASES RESOLVED
NO. OF CASES CLOSED
TOTAL


FINANCIAL STABILITY REPORT – JUNE 2024

4. DEVELOPMENTS IN THE PAYMENTS SYSTEM
The Bank continued to implement policies and initiatives to improve the safety and efficiency of the Nigerian Payments System.
4.1. Bank Verification Number
During the review period, Bank Verification Number (BVN) enrolments increased by 3.72
per cent to 62,384,398 from 60,146,226 at end-December 2023. Active accounts increased
by 4.73 per cent to 225,525,483 of which 92.29 per cent were linked with BVNs, while
26,846 BVNs were watch-listed at end-June 2024.
Table 4.1 BVN Statistics

End-Dec 2023
End-Jun 2024
% Change
BVNs enrolled
60,146,226
62,384,398
3.72
Accounts linked with BVN
195,098,790
208,148,596
6.69
Active Accounts
215,342,112
225,525,483
4.73
Watch-listed BVNs
25,084
26,846
7.02
Source: NIBSS

4.2. Licensing and Supervision of Payment Service Providers
During the review period, final licences were issued to 18 PSPs, bringing the total number
to 226. The newly licensed PSPs comprised one Switching & Processing Company, four
Payment Terminal Service Providers (PTSPs), 12 Payment Solution Service Providers
(PSSPs), and one Super-Agent (SA).
Table 4.2 Payment Service Providers
Licence Type
Dec-2023
Jun-2024
% Change
Card Schemes

Mobile Money Operator

-5.56
Switching/Processing Companies

5.88
Payment Solution Services


Payment Terminal Services Provider

7.89
Payment Solution Services Provider

15.58
Super-Agent

1.96
Total

8.13


FINANCIAL STABILITY REPORT – JUNE 2024

4.3. Cheque Standards and Cheque Printers’ Accreditation Scheme
The Bank renewed the operating licences of two cheque printers and two cheque personalisers during the review period.

4.3.1. Large Value Payments
The volume and value of inter-bank fund transfers through the CBN RTGS System increased to 182,584 and ₦95,087 billion from 158,988 and ₦61,360 billion in the preceding
half-year, reflecting increases of 14.84 per cent and 54.97 per cent, respectively.

4.3.2. Retail Payments
4.3.2.1.
Cheque Clearing
The volume and value of cheques decreased by 11.67 per cent and 2.53 per cent to 1.74
million and ₦1,680.62 billion, from 1.97 million and ₦1,724.29 billion, respectively at endDecember 2023. This development was attributable to the increased adoption of electronic
payment channels.

4.3.2.2.
Electronic Transactions
The volume and value of electronic transactions in the review period increased by 19.16
per cent to 29.60 billion and 23.30 per cent to ₦1,542.02 billion from 24.84 billion and
₦1,250.58 billion, respectively, reflecting enhanced adoption of electronic payment channels.

Table 4.3: Electronic Transactions
Payment
Channel
Number of Connected Terminals
Volume of Transactions
%
Change
Volume
Value ₦’ Billion
%
Change
Value
Dec-23
Jun-24
Jul-Dec

Jan-Jun

Increase/
(decrease)
Jul-Dec

Jan-Jun

Increase/
(decrease)
%
ATMs

17,377.00


POS

Mobile
Money

Online
Transfers
(Internet/Web)

Mobile App

USSD


FINANCIAL STABILITY REPORT – JUNE 2024

Direct
Debit

ACH/NEFT

Total


Figure 4.1 Volume of Electronic Transactions


Figure 4.2 Value of Electronic Transactions


4.3.2.3.
eNaira
The number of new customers onboarded on eNaira was 2,704 during the review period,
bringing the total to 28,460,316 while the number of active wallets remained unchanged at
end-June 2024.


₦’ Billion
End-Dec 2023
End-Jun 2024

₦’ Billion
End-Dec 2023
End-Jun 2024


FINANCIAL STABILITY REPORT – JUNE 2024

Table 4.4: eNaira Wallets

End-Dec 2023
End-Jun 2024
Change
Onboarded Customers
28,457,932
28,460,316
2,704
Active Wallets
197,041
197,041

The eNaira in circulation increased by 31.13 per cent to ₦18.29 billion, from ₦13.95 billion
at end-December 2023. However, there was no minting in the review period. Consumers
and merchants held ₦17.16 billion of the ₦18.29 billion in circulation, while financial institutions held ₦1.14 billion. The eNaira in stock with the Bank decreased by 71.76 per cent.
Table 4.5: Minting and Holdings of eNaira

End-Dec 2023
End-Jun 2024
% Change
Total eNaira Minted
20,000,000,000
20,000,000,000

eNaira in Circulation:
13,950,515,043.79
18,292,910,091.66
31.13
In FIs' wallets
1,135,903,885.90
1,135,903,885.86

In Consumers /
Merchants' wallets
12,814,611,157.84
17,157,006,205.80

133.88
In Stock with CBN
6,050,905,947
1,708,510,899.44
(71.76)


FINANCIAL STABILITY REPORT – JUNE 2024

5. DEPOSIT INSURANCE
5.1. Deposit Guarantee
During the review period, the Nigeria Deposit Insurance Corporation (NDIC) increased the
guaranteed payments to depositors of insured financial institutions to a maximum of
₦5,000,000, from ₦500,000.00 for CMNBs and subscribers of MMOs. In addition, the maximum coverage limit for PMBs, PSBs and MFBs was raised to ₦2,000,000 per depositor,
from ₦500,000 for PMBs and PSBs, and ₦200,000 for MFBs.
5.2. Deposit Insurance Coverage
The fully insured depositors' accounts for CMNBs and MMO subscribers, at the new coverage level of “₦5,000,000 and below” constituted 308,778,358 or 99.53 per cent of the
310,222,06301 accounts at end-June 2024, compared with 315,542,900 or 97.92 per cent
of 322,235,010 accounts at the coverage level of “₦500,000 and below” at end-December
2023.

Table 5.1: Deposit Insurance Coverage for CMNBs, PSBs and MMOs
c
End-Dec 2023
End-Jun 2024
Category of Depositors
No. of Accts
Category of Depositors
No. of Accts
<=N500,000
315,542,900*
<=N5,000,000
308,778,358
>N500,000
6,692,110
>N5,000,000
1,443,705
TOTAL
322,235,010
TOTAL
310,222,063
Fully insured to Total
Accounts (%)
97.92
Fully insured to Total Accounts (%)
99.53
Source: NDIC

Furthermore, the number of fully insured depositors accounts for PSBs, at the new coverage level of ₦2,000,000 and below was 62,069,470 or 99.99 per cent of 62,069,795 accounts in the review period, compared with 49,418,125 or 99.99 per cent of 49,419,025
accounts at the coverage level of ₦500,000 and below in the preceding half-year.
Table 5.2: Deposit Insurance Coverage for PSBs


End-Dec 2023
End-Jun 2024
Category of Depositors
No. of Accts
Category of Depositors
No. of Accts
<=N500,000
49,418,125
<=N2,000,000
62,069,470
>N500,000

>N2,000,000

TOTAL
49,419,025
TOTAL
62,069,795
Fully insured to Total Accounts (%)
99.99
Fully insured to Total Accounts (%)
99.99
Source: NDIC


FINANCIAL STABILITY REPORT – JUNE 2024

Thus, the percentage of fully insured accounts was above the recommended range of 90.00
per cent to 95.00 per cent, by the International Association of Deposit Insurers (IADI).

5.3. Deposit Insurance Funds
The Deposit Insurance Fund (DIF) and Non-Interest Deposit Insurance Fund (NIDIF) grew
by 15.58 per cent and 30.26 per cent to ₦2,323.36 billion and ₦28.80 billion, respectively,
at end-June 2024. Also, the Special Insured Institutions Fund (SIIF) and Payment Service
Deposit Insurance Fund (PSDIF) increased by 4.36 per cent and 61.54 per cent to ₦237.67
billion and ₦0.63 billion, above the levels of ₦227.73 billion and ₦0.39 billion, respectively,
recorded in the preceding half-year. The increases in the funds were attributed to the premium collections and contributions in the review period.

Table 5.3: Balances of Insurance Funds
Fund Types
Institution Type
End-Dec 2023
End-Jun 2024
%

₦’ Billion
₦’ Billion
Change
DIF
Commercial and Merchant Banks
2,010.11
2,323.36
15.58
NIDIF
Non-interest Banks
22.11
28.80
30.26
SIIF
Microfinance/Primary Mortgage
Banks
227.73
237.67
4.36
PSDIF
Payment Service Banks
0.39
0.63
61.54
Source: NDIC

5.4. Bank Liquidation, Payment of Insured Deposits and Liquidation Dividend
The total number of insured financial institutions In-Liquidation increased by one to 651,
comprising 50 CMBs, 546 MFBs, and 55 PMBs following the revocation of the licence of a
commercial bank with national authorisation.

5.4.1. Payments to Insured Depositors of Closed Insured Banks
The sum of ₦8.25 billion was paid to 120,005 insured depositors in the first half of 2024,
compared with ₦5.64 million to 183 insured depositors in the preceding half-year. The latest
payments resulted in cumulative payments of ₦16.53 billion to 564,198 insured depositors
of 50 CMBs In-Liquidation at end-June 2024.
Similarly, the sum of ₦110.20 million was paid to 1,804 insured depositors of MFBs InLiquidation during the review period, compared with ₦1.39 billion to 36,279 insured depositors during the second half of 2023. Cumulative payments increased to ₦5.14 billion made
to 135,500 insured depositors of 546 MFBs In-Liquidation, from the sum of ₦5.03 billion
made to 133,696 insured depositors at the end of the preceding half-year.
In addition, 62 insured depositors of 55 closed PMBs were paid ₦22.07 million, compared
with ₦215.84 million to 792 insured depositors in the preceding half-year. This amounted
to cumulative payments of N362.67 million made to 2,687 insured depositors at end-June
2024.


FINANCIAL STABILITY REPORT – JUNE 2024

Table 5.4 Payments to Insured Depositors of Banks In-Liquidation

For the
Cumulative as at
End-Dec 2023
End-Jun 2024
End-Dec 2023
End-Jun 2024

₦’ Million
₦’ Million
₦’ Million
₦’ Million
CMBs

MFBs

PMBs

Grand Total

Source: NDIC
5.4.2. Payments to Uninsured Depositors3
The sum of ₦515.10 million was paid to uninsured depositors of 49 CMBs In-Liquidation as
dividend, compared with ₦3.16 million in the second half of 2023. The payments to uninsured depositors were from the proceeds of sale of assets and recoveries of debts owed to
the defunct CMBs. The cumulative payments to uninsured depositors of CMBs rose to
₦105.76 billion, from the level of ₦105.25 billion reported in the preceding half-year.
The sum of ₦56.88 million was paid to uninsured depositors of closed 546 MFBs, compared
with ₦169.92 million at end-December 2023, bringing the cumulative payments to ₦247.01
million. Also, cumulative payments rose to ₦261.99 million made to uninsured depositors
of PMBs at end-June 2024.
Table 5.5: Payments of Liquidation Dividend to Uninsured Depositors of Banks In-Liquidation


Cumulative as at

End-Dec 2023
End-Jun 2024
End-Dec 2023
End-Jun 2024

₦’ Million
₦’ Million
CMBs

MFBs

PMBs

Grand Total

Source: NDIC
5.4.3. Payments to Creditors and Shareholders of Banks In-Liquidation
There was no payment during the review period, compared with ₦0.97 million paid to six
creditors of 49 CMBs In-Liquidation in the preceding half-year. The sum of N0.61 million
was paid to a creditor of one MFB during the first half of 2024. In cumulative terms, a total
sum of N1,281.95 million was paid to 1,033 creditors of 50 CMBs In-Liquidation, at endJune 2024. The sum of ₦0.98 million was paid to nine shareholders of closed CMBs compared with ₦2.23 million paid to 18 shareholders at end-December 2023. Cumulatively, the
sum of ₦4,899.14 million had been paid to 1,007 shareholders.

3 Uninsured deposits refer to deposits in excess of maximum deposit insurance coverage.


FINANCIAL STABILITY REPORT – JUNE 2024

5.5. Recovery of Failed Banks’ Assets
5.5.1. Risk Assets Recovery
During the first half of 2024, the sum of N439.66 million, comprising N319.25 million, N30.17
million and N90.24 million was recovered from CMBs, MFBs and PMBs In-Liquidation, respectively.
Table 5.6: Risk Assets Recovery for Banks In-Liquidation


Cumulative as at

End-Dec 2023
End-Jun 2024
% change End-Jun 2024

₦’ Million

₦’ Million
CMBs

MFBs

PMBs

Grand Total
253.94
439.66

32,802.68
Source: NDIC
5.5.2. Realisation of Investments and Fixed Assets
The sum of ₦15.01 million was realised from the investments of banks In-Liquidation, comprising ₦2.39 million, ₦6.67 million and ₦5.95 million in favour of CMBs, MFBs and PMBs,
respectively, compared with the total sum of ₦73.85 million at end-December 2023.
The sum of ₦43.77 million was realised from disposal of fixed assets and rent on properties
of banks In-Liquidation, comprising ₦0.04 million, ₦43.55 million and ₦0.18 million from
CMBs, MFBs and PMBs, respectively.

Table 5.7: Realisation of Investments of Banks In-Liquidation


Cumulative as at

End-Dec 2023
End-Jun 2024
% Change
End-Jun 2024

₦’ Million
₦’ Million
CMBs

MFBs

PMBs

Grand Total
73.85
15.01

6,006.01
Source: NDIC
Table 5.8: Realisation from Disposal and Rents of Fixed Assets of Banks In-Liquidation


Cumulative as at

End-Dec 2023
End-Jun 2024
% Change
End-Jun 2024

₦’ Million

₦’ Million
CMBs

MFBs

PMBs
0.4
0.18

233.60
Grand Total
70.29
43.78

23,885.59
Source: NDIC


FINANCIAL STABILITY REPORT – JUNE 2024

5.6. Other Developments in Deposit Insurance
5.6.1. Fit and Proper Persons Enquiries
In the first half of 2024, the NDIC processed 398 out of 483 Fit & Proper Persons enquiries
on prospective appointees in the financial sector, compared with 311 out of 372 requests
in the preceding period.

5.6.2. Fidelity Insurance Coverage
During the review period, 29 out of 35 CMNBs and two of five PSBs submitted evidence of
Fidelity Insurance Coverage of their employees, compared with 35 out of 36 CMNBs and
four out of five PSBs in the preceding half-year. Furthermore, 23 out of the 29 CMNBs and
two PSBs that submitted evidence of Fidelity Insurance Coverage met the minimum coverage requirement of 15.00 per cent of the bank’s paid-up capital at end-June 2024.
5.6.3. Whistle Blowing
The NDIC investigated and resolved 102 out of the 128 whistle-blowing cases received
from CMNBs on service delivery inadequacies, theft and cash suppression, among others,
compared with 120 out of 205 received in the preceding half-year.


FINANCIAL STABILITY REPORT – JUNE 2024

6. PENSIONS
During the review period, the National Pension Commission (PenCom) continued to focus
on enhanced capacity building for operators, public enlightenment and expansion of the
pension scheme in the public and private sectors.
The total membership of pension schemes increased by 1.96 per cent to 10.4 million, while
Assets under Management (AuM) grew to ₦20.48 trillion from ₦18.35 trillion at end-December 2023. The growth in AuM was largely due to additional contributions and return on
investment during the period under review. Similarly, asset-to-GDP ratio increased to 8.55
per cent from 7.98 per cent driven largely by investment income, improved adoption of the
Contributory Pension Scheme (CPS) by the private sector and some State Governments,
as well as the steady uptake of the Micro Pension Plan by workers in the informal sector.
Figure 6.1: Total Pension Assets to GDP Ratio


6.1. Other Developments in the Nigerian Pension Industry
6.1.1. Retirement Savings Account Transfer
In the review period, two Retirement Savings Account (RSA) transfer quarters were concluded. A total of 43,920 RSAs were transferred, valued ₦249.75 billion, compared with
42,498 valued ₦191.76 billion, in the preceding half-year.
6.1.2. Accrued Pension Rights Payments
A total sum of ₦14.77 billion was paid as Accrued Pension Rights to 3,387 beneficiaries at
end-June 2024, bringing the total Accrued Pension Rights payments since inception to
₦1,081.22 billion for 234,656 RSA holders.
Table 6.1: Accrued Rights Payments


end-Jun-2022
end-Dec-2022
end-Jun-2023
end-Dec-2023
end-Jun-2024
Percentages
Payment Period
End-Dec 2023
End-Jun 2024
Number of Retirees
8,919
3,387
Accrued Rights Paid (₦ billion)
30.08
14.77


FINANCIAL STABILITY REPORT – JUNE 2024

7. INSURANCE
The Insurance Sector recorded improved performance at end-June 2024 as reflected by
key indicators.
7.1. Assets and Premium Income
The total assets of the insurance industry rose by 27.60 per cent to ₦3,687.90 billion from
₦2,890.10 billion, at end-December 2023, while gross premium income increased by 86.69
per cent to ₦813.04 billion, from ₦435.50 billion in the preceding period. Also, net premium
income increased by 32.05 per cent to ₦467.65 billion, from ₦354.13 billion in the second
half of 2023. These outcomes were due to increased awareness created through sustained
market development initiatives and premium rate adjustments on some policies.
Table 7.1: Assets and Premium Income
Period
End-Dec 2023
₦ billion
End-Jun 2024
₦ billion
% Change

Gross Premium Income
435.50
813.04
86.69
Net Premium Income
354.13
467.65
32.05
Total (Gross) Claims
277.57
297.90
7.32
Total Assets
2,890.10
3,687.90
27.60
Source: NAICOM

7.2. Key Insurance Industry Financial Soundness Indicators
The Nigerian insurance industry sustained its resilience as shown by the key performance
indicators.
7.2.1. Assets to GDP
The size of the industry as measured by the ratio of assets to the GDP increased by 0.38
percentage point, to 1.54 per cent, from 1.16 per cent at end-December 2023. The growth
was largely driven by increased premium rates, asset revaluation, growth in customer base
and strategic partnerships.
Figure 7.1 Total Insurance Assets to GDP


end-Jun-2022 end-Dec-2022 end-Jun-2023 end-Dec-2023 end-Jun-2024
Percentages


FINANCIAL STABILITY REPORT – JUNE 2024

7.2.2. Capital Adequacy and Leverage
The industry remained solvent in the review period as the CAR, measured by capital to total
assets, was above the regulatory threshold of 40 per cent. However, it declined by 3.01
percentage points to 41.07 per cent from 44.08 per cent at end-December 2023.
Also, the ratio of owners’ equity to total invested assets rose significantly by 335.14 percentage points to 1,113.63 per cent from 778.49 per cent in the preceding half-year. The
increase, driven largely by voluntary capital injection and earnings retention policy, reflected
the strong capital base of the industry.

Figure 7.2: Equity to Total Invested Assets


7.2.3. Liquidity
The industry’s liquidity level remained high and sufficient to cover significant claims as liquid
assets to current liabilities ratio stood at 120.15 per cent at end-June 2024.

7.2.4. Other Prudential Ratios
The retention ratio, measured as insurance premium retained to total premium generated,
increased by 0.44 percentage point to 71.93 per cent, from 71.49 per cent at end-December
2023, reflecting an improvement in the industry’s capacity to undertake large insurance
policies.
The combined ratio, which measures the profitability of insurance companies, increased by
2.55 percentage points to 71.06 per cent at end-June 2024, but remained below the 100.00
per cent threshold.


end-Jun-2022
end-Dec-2022
end-Jun-2023
end-Dec-2023
end-Jun-2024


FINANCIAL STABILITY REPORT – JUNE 2024

Table 7.2 Insurance Industry Dashboard
KEY INDICATORS
End-Dec

End-Jun

CAR (Capital/Total Asset)

Liquidity Ratio (liquid assets/current liabilities)

Claims Ratio %

Expense Ratio %

Combined Ratio %

Underwriting Profit Margin

Investment to Total Assets Ratio %

Change in Gross Written Premium (in %)

Change in Net Written Premium (in %)

Change in Capital & Surplus (in %)

Retention Ratio (in %)

Return on Assets (in %)


FINANCIAL STABILITY REPORT – JUNE 2024

8. RISKS TO THE FINANCIAL SYSTEM
8.1. Credit Risk

Risk Rating (Medium, Trending upward)


Financial institutions faced considerable credit risk in the first half of 2024, owing largely to
exposures to the Oil & Gas and Services sectors, exacerbated by global crude oil market
volatilities, supply chain disruptions, climate change and exchange rate fluctuations.
Credit risk is expected to remain elevated in the second half of 2024, resulting from the
impacts of higher lending rates, persistent inflationary pressures and tight financial conditions, which could constrain loan repayment capacity.
However, the introduction of additional capital requirements for CMNBs, enforcement of
obligor limits and sustained implementation of the GSI policy are expected to improve solvency and mitigate credit risk.


8.2. Liquidity Risk
Risk Rating (Low, Stable)
At end-June 2024, the liquidity ratios of CMNBs, PMBs, DFIs and MFBs remained above
regulatory benchmarks. The overall robust liquidity position was due largely to significant
holdings of Government securities by financial institutions. The banking sector liquidity positions are expected to remain stable in the second half of 2024.

8.3. Market Risk
Risk Rating (Medium, Trending up)

Money market rates were relatively stable as volatility in both the OBB and inter-bank call
segments moderated in the first half of 2024. However, the exchange rate depreciated owing to the lingering impact of operational changes introduced in the foreign exchange market.
Domestic crude oil output improved but remained below the OPEC production quota. Meanwhile, improved security surveillance in the oil producing region and investments are expected to further increase output.
Overall, market risk is projected to moderate in the medium to long term, following the sustained implementation of broad economic reforms, which are expected to stabilise the exchange rate, moderate inflation and improve growth.


FINANCIAL STABILITY REPORT – JUNE 2024

8.4. Operational Risk
Risk Rating (Medium, Trending up)
Operational risk in the first half of 2024 remained elevated due to the challenging business
environment, including substantial infrastructure gaps, rising cost of energy and transportation, as well as high attrition of employees in the financial services sector. In addition, the
rising incidence and cost of reported frauds driven largely by insider abuse posed significant
risks.
Operational risk is expected to remain at the level it was in the first half of 2024, owing
mainly to high cost of doing business. However, the adoption of hybrid operating models
by CMNBs, improved monitoring and audit processes, robust IT infrastructure, as well as
enhanced compliance with extant regulations, are expected to moderate operational risk.

8.5. Cybersecurity Risk
Risk Rating (High, Trending up)
Cybersecurity risk remained elevated during the first half of 2024, exacerbated by access
control lapses, insider threat and third-party vulnerabilities. Furthermore, the high turnover
of IT professionals contributed to the increased incidence of cybersecurity breaches.
Cybersecurity risk is expected to remain high in the second half of 2024 following increased
digital integration of the financial system, outsourcing of critical services and use of cloud
services. However, the Bank’s revised policy on Risk-Based Cybersecurity Framework for
CMNBs and PSBs, enhanced cyber incident reporting portal, strengthening of third-party
risk management protocols and regular staff training are expected to boost FIs resilience
to cyber incidents.

8.6. Macroeconomic Risk
Risk Rating (High, Trending up)
The adverse impact of high inflation, exchange rate pressures and the resultant contractionary monetary policy stance of the Bank to moderate prices, posed significant macroeconomic risk during the first half of 2024. This situation was compounded by the country’s
inability to meet the OPEC production quota, which resulted in tight fiscal space, and reduced accretion to the reserves.
To moderate the risk in the second half of the year, the Bank will sustain its efforts to tame
inflation, stabilise the exchange rate and enhance collaboration with the fiscal authorities in
the implementation of economic reforms.


FINANCIAL STABILITY REPORT – JUNE 2024

9. Outlook
Global economic activities declined marginally in the first half of 2024, largely driven by
dampening effects of tight monetary policy of major central banks, supply-side disruptions
and heightened trade tensions. However, global financial conditions softened as near-term
financial stability risks moderated owing to the expected monetary easing in the advanced
economies. Global growth is projected to moderate to 3.2 per cent at end-December 2024
from 3.3 per cent at end-December 2023. Growth in AEs, EMDEs and SSA is estimated at
1.7 per cent, 4.3 per cent and 3.7 per cent, respectively, in 2024.
Global inflation is projected to sustain its downward trend, supported by the tight policy
stance of most monetary authorities, decline in some commodity prices, and slowdown in
wage growth.
The Nigerian economy is expected to grow at 3.3 per cent in the second half of 2024, mainly
supported by the services sector. Inflationary pressures are expected to moderate, owing
mainly to sustained monetary policy tightening, decline in food prices as the harvest season
approaches and reduction in the price of PMS owing to commencement of sales of petroleum products by some local refineries.
The domestic financial market is expected to maintain its positive performance as most
banks continue to mobilise funds to meet the new minimum capital base. Accretion to the
external reserves is expected to increase, supported largely by improved oil production and
sustained implementation of economic reforms, which would strengthen investor confidence and improve capital inflows.
The financial system regulators will continue to strengthen the supervision of financial institutions to enhance their safety, soundness and stability through the use of early warning
tools to assess risks and vulnerabilities in the system. In this connection, the Bank will
continue to collaborate with regulators in other jurisdictions to strengthen cross border supervision. Also, the Bank will strengthen its collaboration with relevant institutions to enhance the reliability and efficiency of the payments system.
The Nigerian capital market is expected to sustain its bullish performance owing to the
positive impact of the ongoing economic reforms, banks’ recapitalisation efforts and positive investor sentiments. Also, the pension industry is expected to improve as workers in
the informal sector maintain a steady uptake of micro pension plans and more private institutions and State Governments comply with the provisions of the Pensions Reform Act
2004. Also, the sustained implementation of the recapitalisation policy drive and other market development initiatives are expected to improve the performance of the insurance industry.
High inflation, foreign exchange pressures and tight fiscal space continue to pose downside
risks to financial stability. However, the outlook is positive, given that the Bank and other
regulatory agencies, will sustain the policy and risk-mitigating measures designed to promote a safe, robust and resilient financial system.


FINANCIAL STABILITY REPORT – JUNE 2024

10. APPENDIX 1: INDICES OF SELECTED STOCK MARKETS
Source: Bloomberg

Country
Stock Index
End-Dec

(1)
End-Dec

(2)
End-June

(3)
End-Dec

(4)
End-June

(5)
%
Change
(5) & (4)
AFRICA
Nigeria
NGX All-Share Index

South Africa
JSE All-Share Index

Kenya
Nairobi NSE 20 Index

Egypt
EGX CASE 30

Ghana
GSE All-Share Index

NORTH AMERICA
US
S&P 500

Canada
S&P/TSX Composite

Mexico
Bolsa

SOUTH AMERICA
Brazil
Bovespa Stock

Argentina
Merval

Columbia
COLCAP

EUROPE
UK
FTSE 100

France
CAC 40

Germany
DAX

ASIA
Japan
NIKKEI 225

China
Shanghai SE A

India
BSE Sensex


FINANCIAL STABILITY REPORT – JUNE 2024

11. APPENDIX 2: PERFORMANCE OF SELECTED CURRENCIES AGAINST THE US
DOLLAR
©
Currency
End-Dec

(1)
End-Dec

(2)
End-June

(3)
End-Dec

(4)
End-Jun

(5)
%
Change
(4) & (5)
Africa
South Africa
Rand

Kenya
Shilling

Egypt
Pound

Ghana
Cedi

Nigeria
Naira


North America
Canada
Dollar

Mexico
Peso

South America
Brazil
Real

Argentina
Peso

Colombia
Peso

Europe
UK
Pound

Euro Area
Euro

Russia
Ruble
75.26
74.36
89.34

85.99
4.66
Asia
Japan
Yen

China
Renminbi

India
Rupee

Bloomberg:


FINANCIAL STABILITY REPORT – JUNE 2024

12. APPENDIX 3: MONETARY POLICY RATES OF SELECTED COUNTRIES
Country
Jun-23
Dec-23
Jan-24
Feb-24
Mar-24
Apr-24
May-24
Jun-24
Developed Economies
Japan

Europe
3.5

3.75
UK


US

Canada

South Korea

New Zealand

Australia

Asia
Indonesia
5.75

6.25
6.25
6.25
Malaysia

BRICS
Brazil

Russia
7.5

India

China

South Africa

Other Emerging Economies & South America
Mexico


Chile


5.75
Colombia
13.25


Africa
Egypt

Ghana
29.5
30.33

Nigeria


FINANCIAL STABILITY REPORT – JUNE 2024

13. APPENDIX 4: REAL SECTOR INITIATIVES: SUMMARY OF DISBURSEMENTS AND
REPAYMENTS

ITEM
End-Jun 2024
End-Dec 2023
S/N
Intervention
Disbursement
Repayment
(₦' Billion)
Disbursement
Repayment
(₦' Billion)
(₦' Billion)
(₦' Billion)

Power and Airline Intervention Fund (PAIF)


Nigerian
Electricity
Market
Stabilization
Fund
(NEMSF)


Nigerian Electricity Market Stabilization Fund- 2
(NEMSF 2)


Nigerian Electricity Market Stabilization Fund-3
(NEMSF-3)


Nigerian Bulk Electricity Trading- Payment Assurance
Fund (NBET-PAF)

-
-
-

Family Homes Intervention Facility (FHIF)
-
-

Solar Connection Facility (SCF)


National Mass Metering Programme (NMMP)


Intervention Facility for National Gas Expansion
(IFNGEP)


CBN-Bank Of Industry Intervention Fund (CBIF)
-
-

-

Real Sector Support Facility (RSSF)


Textile Sector Intervention Facility (TSIF)


Differentiated Cash Reserve Requirement (RSSFDCRR)


Small & Medium Enterprise Restructuring & Refinancing Facility (SMERRF)


Health Sector Intervention Facility (HSIF)


Covid-19 Intervention for the Manufacturing Sector
(CIMS)


Health Sector Research & Development Intervention
Scheme (HSRDIS)


100 FOR 100 Policy on Production and Productivity


Youth Entrepreneurship Intervention Programme
(YEDP)


Targeted Credit Facility (TCF)


Creative Industry Financing Initiative (CIFI)


National Youth Intervention Fund (NYIF)


Agri-business Small & Medium Enterprises Intervention Scheme (AgSMEIS)


Tertiary Institution Entrepreneurship Scheme (TIES)


Anchors Borrowers Programme (ABP)


Accelerated
Agricultural
Development
Scheme
(AADS)


Commercial Agriculture Credit Scheme (CACS)


Paddy Aggregated Scheme (PAS)


Maize Aggregated Scheme (MAS)


Rice Distribution Facility (RDF)


National Food Security Programme (NFSP)


NESF


Export Financing Initiative (EFI)

24.73
-
7.08

Presidential Fertilizer Initiative (PFI)


Export Development Fund (EDF)


Micro, Small and Medium Enterprise Development
Fund (MSMEDF)


Shared Agency Network Expansion Facility (SANEF)

TOTAL

Source: Central Bank of Nigeria
*Figures are provisional and are as of June 30, 2024


FINANCIAL STABILITY REPORT – JUNE 2024

14. APPENDIX 5: SELECTED FINANCIAL SOUNDNESS INDICATORS OF THE NIGERIAN BANKING INDUSTRY
Indicators

EndJun
EndDec
EndJun
EndDec
EndJun
EndDec
End -June
1. Assets Based Indicators
Nonperforming loans to total gross loans *

Liquid assets (core) to total assets*

Liquid assets (core) to short-term liabilities*

Residential real estate loans to total gross
loans

Commercial real estate loans to total gross
loans

Return on assets*

2. Capital Based Indicators
Regulatory capital to risk-weighted assets*

Regulatory Tier 1 capital to risk-weighted assets*

Nonperforming loans net of provisions to capital *

3. Income and Expense Based Indicators
Interest margin to gross income*

Noninterest expenses to gross income*

Personnel expenses to noninterest expenses

4. Banks’ Exposures to Oil & Gas, Manufacturing and Services
Oil & Gas to Gross Loans

Manufacturing to Gross Loans

Services to Gross Loans

*FSIs are computed based on IMF-FSI Manual


FINANCIAL STABILITY REPORT – JUNE 2024

15. APPENDIX 6: Stress Test Methodology, Assumptions and Scenarios
Methodology
A multifactor shock stress testing methodology was used to assess the adequacy of banks’
solvency and liquidity positions in relation to economic activities. Different scenarios were
used, encompassing the principles of plausibility, duration, and severity to capture tail risks.
Macroeconomic Assumptions
•
Persistence in global inflationary pressures leading to prolonged contractionary policy
actions and sharp contraction of global output.
•
Moderate to sharp fall in global demand for crude oil leading to commensurate decline
in oil prices.
•
Local crude oil production remained significantly below the approved OPEC quota for
Nigeria.
•
High inflation, rising unemployment, heightened security challenges and low agricultural production.
Satellite Assumptions
•
Macroeconomic conditions and developments apply to the banking industry symmetrically.
•
Severity and determination of tail risks are generally recursive with significant likelihood.
•
There are no regulatory interventions nor banks’ management actions during the
shocks.
•
Capitalization under stress is first mitigated by net income as follows:
[〖Capitalization〗_((t))+〖Net Income〗_((t+1)) ]/〖RWAs〗_((t+1))
•
Fuel subsidy policy change, persistent inflationary pressures, and prolonged contractionary policy stance.
Impact on banks:
•
Increased NPLs as households and corporates experience more difficulty in servicing
their loans.
•
Mark-to-market losses on fixed income securities as a result of rise in interest rates,
especially those classified under FVTPL & FVTOCI.
•
Maturity mismatch at the shorter end of interest sensitive assets/liabilities. Through assets and maturity transformation, banks borrow short and lend long to gain from interest
differential. In periods of stress, this has both liquidity and capital implications. Prolonged high interest rates regime will result in losses to banks with long positions.
Other Credit-related Risks
In periods of heightened stress, the following are significant risks to assess:
•
Credit concentration risk is often pronounced in period of stress, resulting in significant
solvency/capital implications for banks.
Contagion Risk Analysis
Interconnectedness, especially through interbank transactions, generates and amplifies significant risks to the banking system, leading to possible system collapse.


FINANCIAL STABILITY REPORT – JUNE 2024

Unification of the Foreign Exchange Windows & Floating of the Naira
•
Resulted in the depreciation of the naira against other currencies, particularly the US
dollar.
•
Impact on banks:
o Translation gain/loss on their net foreign assets
o Increased NPLs in FCY-denominated loan portfolio.
o Increased cost of servicing FCY-denominated liabilities - Eurobonds and other
securities issued in FCY.
Climate Risk Factors
Physical
o Extreme weather conditions resulting in severe and frequent floods, affecting businesses and impacting:
•
Exposure to agriculture in varying degrees of severity; and
•
General credit exposure in varying degrees of severity.
Transition
Increased cost of fossil energy owing to regional conflicts, international sanctions, and domestic reforms (fuel subsidy removal and increased electricity tariff) leading to shift towards ecofriendly sources of energy such as solar power system, electric car, gas powered generators
and vehicles. These are expected to impact exposures to:
o Downstream oil and gas; and
o Power and energy sub-sector


FINANCIAL STABILITY REPORT – JUNE 2024

16. APPENDIX 7: CLIMATE RISK STRESS TEST SCENARIO ASSUMPTIONS
Scenarios
Mild
Moderate
Severe
Physical risk factors –
Losses in credit exposures due to floods affecting businesses.
i) 1% loss in total credit
exposure (excluding
Agriculture)
ii) 10% loss in Agric-
credit exposure

i)
2.5% loss in total
credit exposure (excluding Agriculture)
ii) 25% loss in Agric-
credit exposures
i)
5% loss in total
credit exposures (excluding Agriculture)
ii) 50% loss in Agric-
credit exposures
Transition risk factors -
Losses in credit exposures due to shift to
eco-friendly technologies.
i)
5% loss in exposure
to Downstream Subsector
ii) 5% loss in exposure
to Power & Energy
Sub-sector
i)
10% loss in exposure
to the Downstream
Sub-sector
ii) 10% loss in exposure
to the Power & Energy Sub-sector
i) 15% loss in exposure
to the Downstream
Sub-sector
ii) 15% loss in exposure
to the Power & Energy
Sub-sector


FINANCIAL STABILITY REPORT – JUNE 2024

17. APPENDIX 8: LIQUIDITY STRESS TEST ASSUMPTIONS
Implied Cash Flow Analysis
The Implied Cash Flow Analysis (ICFA) assessed the ability of the banking system to
withstand unanticipated substantial withdrawals of deposits, short-term wholesale and
long-term funding over 5 days and cumulative 30 days, with specific assumptions on
fire sale of assets.
The test assumed gradual average outflows of 3.8, 5.0 and 1.5 per cent of current &
savings deposits, short-term funding and long-term funding respectively, over a 5-day
period and a cumulative average outflow of 22.0, 11.0 and 1.5 per cent of current &
savings deposits, short-term funding and long-term funding respectively, on a 30-day
balance. It also assumed that the assets in Table 3.10 would remain unencumbered
after a fire sale.


The Maturity Mismatch/Rollover Risk
This assessed funding maturity mismatch and rollover risk for assets and liabilities in
the 1-30 and 31-90 day buckets, with assumptions of availability of funding from the
CBN and intra-group as described below:

i. Test 2a: Descriptive Maturity Mismatch assumed that the baseline mismatch remained, but 5 per cent of total deposits would be made available by the CBN and the
intra-group;

ii. Test 2b: Static Rollover Risk assumed that 80.0 and 72.0 per cent of the funding
in the 1-30 and 31-90 day buckets would be rolled over, with no possibility to close
the funding gap from other buckets. However, 5 per cent of the total deposits would
still be available from the CBN and the intra-group; and

iii. Test 2c: Dynamic Rollover Risk made the same assumption as in 2b above, but
with the option of closing the liquidity gap from other buckets.

TABLE 17.1 PERCENTAGE OF ASSETS UNENCUMBERED AFTER FIRE SALES
Item
No
Assets
% Unencumbered
1.
Cash and cash equivalents

2.
Current account with CBN

3.
Government bonds, treasury bills and other assets with 0% risk-weighting
66.5
4.
Certificates of deposit held
66.5
5.
Other short-term investments

6.
Collateralized placements and money at call

FINANCIAL STABILITY REPORT – JUNE 2024

7.
CRR

FINANCIAL STABILITY REPORT – JUNE 2024

18. APPENDIX 9: PENSION INDUSTRY PORTFOLIO
ASSET CLASSES
H2 2023
H1 2024

₦ 'Million
₦ 'Million
Domestic Ordinary Shares
1,571,201.45
1,967,462.68
Foreign Ordinary Shares
202,188.88
279,741.38
Total FGN Securities
11,920,700.13
12,960,020.11
* FED. Govt Bonds (HTM)
11,450,156.80
12,221,035.89
* Treasury Bills
214,500.69
399,459.03
* Agency Bonds (NMRC)
9.895.76
8,802.08
* Sukuk Bonds
128,803.13
114,196.04
* Green Bonds
117,343.74
216,527.07
State Govt Securities
271,359.88
260,102.82
Corp. Debt Securities
1,906,028.97
2,207,237.74
* Corporate Bonds (HTM)
1,418,445.86
1,436,607.49
* Corporate Bonds (AFS)
471,883.85
744,163.81
* Corporate Infrastructure Bonds
13,859.72
15,861.31
* Corporate Green Bonds
1,839.54
10,605.13
Money Mkt Instr.
1,637,149.79
1,913,056.79
Fixed Deposit/ Bank Acceptance
1,374,357.44
1,482,186.93
Commercial Papers
262,792.35
327,346.72
Foreign Money Mkt Instr.
47,360.90
103,523.13
Mutual Funds
110,700.10
83,017.70
Open/Close Funds
87,432.75
67,989.13
REITs
23,267.36
15,028.56
Supra-National Bonds
10,334.70
22,717.60
Infrastructure Funds
143,168.07
162,488.06
Real Estate
257,278.20
278,442.12
Private Equities
71,660.72
109,199.65
Cash & Other Assets
206,516.33
240,745.17
Current Net Asset Value
18,355,648.11
20,484,231.81


FINANCIAL STABILITY REPORT – JUNE 2024

19. ACKNOWLEDGMENTS - LIST OF MAJOR CONTRIBUTORS
S/N Name
Organisation
1. J.S. Onojah
Financial Policy and Regulation Department, CBN
2. J. A. Mohammed
Financial Policy and Regulation Department, CBN
3. M.K. Ibrahim
Financial Policy and Regulation Department, CBN
4. A. Sylvanus-Dannana
Financial Policy and Regulation Department, CBN
5. A.K. Usman
Financial Policy and Regulation Department, CBN
6. M.E. Obiechina (PhD.)
Development Finance Department, CBN
7. P.I.Oluikpe (PhD.)
Development Finance Department, CBN
8. A.S. Okoro
Monetary Policy Department, CBN
9. V.U. Oboh (PhD.)
Monetary Policy Department, CBN
10. A.A. Akintola
Research Department, CBN
11. B.A. Gaiya (PhD.)
Research Department, CBN
12. I.S. Omileye
Banking Supervision Department, CBN
13. R.I. Sike
Banking Supervision Department, CBN
14. S. Bawa
Statistics Department, CBN
15. . Salihu
Statistics Department, CBN
16. E.O. Shonibare
Risk Management Department, CBN
17. J.A. Angaye
Risk Management Department, CBN
18. Phebian N. Bewaji
Financial Markets Department, CBN
19.

20. V.A. Martins
Other Financial Institutions Supervision Department, CBN
21. J. Imandi
Other Financial Institutions Supervision Department, CBN
22. C.R. Okereke
Reserve Management Department, CBN
23. A.P. Mikailu
Reserve Management Department, CBN
24. M.K. Muazu
Consumer Protection Department, CBN
25. A.G. Zanna
Consumer Protection Department, CBN
26. C. Oko-Oboh
Banking Services Department, CBN
27. O.A. Ojerinde
Banking Services Department, CBN
28. I.A. Adeleke
Payments System Management Department, CBN


FINANCIAL STABILITY REPORT – JUNE 2024

29. O. Umeano CFA, PhD.
Securities and Exchange Commission
30. M. Mammada
Nigeria Insurance Commission
31. Bilyaminu Yakubu
National Pension Commission
32. H. S. Kollere
Nigeria Deposit Insurance Corporation

The Report is produced and supervised by the Financial Policy and Regulation Department
in collaboration with other Regulators.

JOHN S. ONOJAH
DIRECTOR, FINANCIAL POLICY AND REGULATION DEPARTMENT