FINANCIAL STABILITY REPORT – JUNE 2023
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CONTENTS


FINANCIAL STABILITY REPORT – JUNE 2023


FINANCIAL STABILITY REPORT – JUNE 2023
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Anti-Money Laundering, Combating the Financing of Terrorism and Countering

Validation of Compliance Claims and Conduct of Mystery Shopping Exercise

3.10.1


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4.4.1
4.4.2
4.4.3


6.1
6.1.1
6.1.2


8.1
8.2
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APPENDIX 3: REAL SECTOR INTERVENTIONS: SUMMARY OF DISBURSEMENTS

APPENDIX 4: SELECTED FINANCIAL SOUNDNESS INDICATORS OF THE

APPENDIX 5: PENSION INDUSTRY PORTFOLIO FOR THE PERIOD ENDED 31


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LIST OF FIGURES
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FIGURE 2.23 PRIMARY MARKET: NTBS TRANSACTIONS AT END-DECEMBER 2022 AND END-JUNE


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LIST OF TABLES
TABLE 2.11: MATURITY STRUCTURE OF MFBS LOANS AND ADVANCES AND DEPOSIT LIABILITIES 26
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TABLE 2.25: WOMEN AND WOMEN-OWNED ENTERPRISES TRANSACTIONS ON THE NATIONAL


FINANCIAL STABILITY REPORT – JUNE 2023
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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
FINANCIAL STABILITY REPORT – JUNE 2023
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Acronym
Description
CRMS
Credit Risk Management System
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
FINANCIAL STABILITY REPORT – JUNE 2023
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Acronym
Description
GDP
Gross Domestic Product
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
FINANCIAL STABILITY REPORT – JUNE 2023
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Acronym
Description
MSMEs
Micro, Small and Medium Enterprises
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
Nigeria 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
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Acronym
Description
OFIs
Other Financial Institutions
OPEC
Organisation of Petroleum Exporting 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
FINANCIAL STABILITY REPORT – JUNE 2023
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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


FINANCIAL STABILITY REPORT – JUNE 2023
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GOVERNOR’S STATEMENT
The June 2023 edition of the Financial Stability Report (FSR) highlights developments in
the financial system during the first half of 2023. Key headwinds that undermined global
growth during the period include the impact of geopolitical tensions, high inflation, tight
monetary and financial conditions, high debt levels and limited fiscal buffers in many economies. Consequently, global output was expected to slow down to 3.0 per cent in 2023,
from 3.5 per cent in 2022.
Growth in the Advanced Economies (AEs) was estimated to decline to 1.5 per cent in 2023,
from 2.7 per cent in 2022. However, growth in Emerging Markets and Developing Economies (EMDEs) was expected to remain unchanged at 4.0 per cent in 2023, same as in
2022. Growth in Sub-Saharan Africa (SSA) was estimated at 3.50 per cent, lower than the
3.90 per cent in 2022. Inflation in most regions remained high, but moderated relative to
the levels in the preceding half year. In AEs, inflation decelerated in the first half of 2023,
owing largely to tight monetary and financial conditions, and falling energy and commodity
prices.
The Nigerian economy sustained its growth trajectory, albeit, at a slower pace, relative to
the level in the second half of 2022. Output grew by 2.41 per cent, compared with 2.91 per
cent in the preceding half year, driven by the non-oil sector, specifically, the Services and
Agriculture sectors. Credit to the private sector also grew, reflecting government policies
towards increased lending to the priority sectors of the economy.
Gross external reserves decreased to US$33.71 billion, from US$36.61billion at end-December 2022, reflecting high demand pressure and low capital inflows.
Notwithstanding the headwinds in the macroeconomic environment, the financial sector
remained resilient and stable, supported by the sustained implementation of various regulatory and supervisory measures. Thus, the key financial soundness indicators remained
within regulatory thresholds.
The outlook for global growth remained cautiously optimistic as a result of the decelerating
inflationary pressures across several economies, increased growth momentum, lower energy prices and eased supply constraints due to the reopening of the Chinese economy.
On the domestic front, the recently introduced economic reforms, particularly the petroleum
subsidy removal and the changes in the operations of the foreign exchange market are
expected to boost growth and enhance macroeconomic stability.
The Bank, in collaboration with the fiscal authorities and other regulators, will continue to
implement policies and initiatives to promote a stable, sound, and resilient financial system.


Olayemi Michael Cardoso
Governor, Central Bank of Nigeria

FINANCIAL STABILITY REPORT – JUNE 2023
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FOREWORD
The global financial system remained weak in the review period, largely as a result of tight
monetary and financial conditions, geopolitical tensions, particularly the protracted RussiaUkraine crisis with its disruptive effects on global supply chains management. Other key
factors that shaped the financial system included, high debt levels and limited fiscal buffers
in several economies.
Despite these headwinds, the Nigerian financial system remained resilient and stable owing
largely to effective regulatory oversight and innovative policy initiatives. Accordingly, the
key financial soundness indicators were within the prudential thresholds. Further analysis
of vulnerabilities and risks in the banking industry through top-down solvency and liquidity
stress tests indicated the resilience of the banking system and its capacity to withstand
macroeconomic shocks. Other subsectors in the financial system, including the capital market and pensions, also recorded improved performances.

The June 2023 edition of the FSR comprised nine sections. Section one discusses key
developments in the global and domestic economies, while Section two examines financial
system developments. Section three analyses the major issues shaping financial stability,
including regulatory and supervisory activities. Section four highlights major developments
in the payments system, while Section five focuses on the activities of the Nigeria Deposit
Insurance Corporation. Developments in the pension and insurance subsectors are discussed in Sections six and seven respectively, while Sections eight and nine highlight the
key risks and outlook for the financial system, respectively.

In general, the Report provides a critical analysis of the Nigerian financial system, within
the review period. It also highlights the policy measures adopted by relevant regulators to
sustain the continued safety, resilience, and soundness of Nigeria’s financial system and
provides the near-term outlook.

The Bank, in collaboration with other financial system regulators, would continue to assess
emerging developments in the financial system to identify potential vulnerabilities and risks,
with a view to implementing appropriate policy measures to sustain the stability of the financial system.


Mr. Philip Ikeazor
Deputy Governor, Financial System Stability


FINANCIAL STABILITY REPORT – JUNE 2023
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EXECUTIVE SUMMARY
Global growth was generally subdued in the first half of 2023, dampened by the lingering
effects of the Russia-Ukraine crisis and increased global polarisations, heightened public
debt levels and constrained fiscal buffers. Furthermore, the US banking industry turmoil,
triggered by the tighter monetary and financial conditions, contributed to the build-up of
vulnerabilities in the global financial markets.
The successive policy rate hikes by several central banks in response to elevated inflationary pressures resulted in a trade-off between tightened financial conditions and growth outcomes. Thus, expansion in global output was expected to slow down to 3.0 per cent in
2023, from 3.5 per cent at end-December 2022. Global inflation moderated across most
economies in response to concerted rate hikes by most central banks in the first half of
2023.
The domestic economy grew by 3.20 per cent at end-June 2023, relative to 3.30 per cent
at end-December 2022. Headline inflation (year-on-year) rose to 22.70 per cent, from 21.34
per cent at end-December 2022, driven largely by the rise in operational costs occasioned
by removal of petroleum subsidy, global supply chain disruptions, and exchange rate pressures attributed to the operational changes in the domestic foreign exchange market. Gross
external reserves further decreased by 6.51 per cent to $33.71 billion, from US$36.61 billion
at end-December 2022.
The domestic financial system remained largely resilient, reflecting sustained investor confidence in the economy, following the successful political transition and long-run optimism
based on the newly introduced economic reforms. Thus, key sub-sectors of the financial
system, including banking, capital market and pension recorded positive performances, except the insurance sub-sector, which recorded a mixed performance. During the review
period, the Bank sustained its implementation of various regulatory and supervisory
measures, including onsite examinations, off-site surveillance, AML/CFT/CPF assessments, and the Global Standing Instruction (GSI) policy to promote the safety and soundness of the financial system. These measures enhanced the performance of financial
soundness indicators, which remained largely within or above prudential benchmarks.
The banking industry recorded increased competition as the Herfindahl Hirschman Index
(HHI) rose to 973.70 and 981.80, from 944.96 and 933.89 for deposits and assets, respectively. The industry capital adequacy ratio, at 11.23 per cent, was above the regulatory
threshold of 10.00 per cent. Also, the result of the stress test showed the sustained resilience of the industry to solvency and liquidity shocks. Consumer confidence in the banking
industry was further enhanced with the resolution or closure of 88.74 per cent of reported
consumer complaints.
The Bank continued to moderate its targeted interventions in the priority sectors of the
economy and intensified debt recovery drive. The adoption of eNaira, Africa’s first Central
Bank Digital Currency (CBDC), recorded a huge increase of 1,121.30 per cent to
27,971,460 wallets, driven largely by the deployment of new features, including Near Field
Communication feature, eNaira Lite App and the eNaira card.
The key risks to financial system stability during the review period included elevated inflation, exchange rate pressures, lingering spill-over effects of the Russia-Ukraine crisis,
FINANCIAL STABILITY REPORT – JUNE 2023

cyber-risk from increased use of digital payment platforms, threats of cyber-attacks, as well
as increased operating costs and operational risks. Consequently, the Bank and other financial system regulators implemented appropriate measures to extensively mitigate these
risks.
Overall, the outlook for financial stability remained optimistic, given enhanced fiscal and
monetary policy coordination as well as robust and proactive policy measures by the Bank,
in collaboration with other financial sector regulators, towards enhancing the soundness
and resilience of the financial system.


FINANCIAL STABILITY REPORT – JUNE 2023

1. ECONOMIC AND FINANCIAL DEVELOPMENTS
1.1 Global Developments
1.1.1 Output
Global economic activities slowed in the first half of 2023, reflecting the impact of headwinds including geopolitical tensions, particularly the Russia-Ukraine crisis which disrupted
global supply chains, resulting in high food and energy prices. Also, the lingering effects of
COVID-19 pandemic and the persistently high inflation which eroded household purchasing
power and real returns on investments, exacerbated the weakness in growth. In addition,
the tighter monetary and financial conditions contributed to the build-up of vulnerabilities,
which triggered the banking crisis in the United States. Other factors, such as high debt
levels and limited fiscal buffers, continued to constrain the fiscal space and impede growth
recovery in many economies. Thus, global output was expected to decline to 3.0 per cent
in 2023 from 3.5 per cent at end-December 2022. (IMF, WEO July 2023 Update).

Growth in the Advanced Economies (AEs) was estimated at 1.5 per cent, compared with
2.7 per cent in 2022. In the Emerging Markets and Developing Economies (EMDEs), growth
was estimated at 4.0 per cent in 2023, the same as the level in 2022. This indicated a slight
downgrade from the IMF's previous forecast of 4.1 per cent, due to the tightening global
financial conditions. Growth in the sub-Saharan Africa (SSA) region was estimated at 3.5
per cent in 2023, compared with 3.9 per cent recorded in 2022.

Figure 1.1 Global Growth

Source: IMF’s World Economic Outlook Update, July 2023, *National Bureau of Statistics (NBS)


-6
-4
-2

World
Advanced
Economies
Emerging Market
and Developing
Economies
Middle East &
Central Asia
Sub-Saharan Africa

FINANCIAL STABILITY REPORT – JUNE 2023

Table 1.1: Global Growth

End-Jun

End-Dec

End-June

World

Advanced Economies

United States

Euro Area

Japan

United Kingdom

Canada

Emerging Market and Developing Economies

China

Middle East & Central Asia

Sub-Saharan Africa

Nigeria*


Source: IMF’s World Economic Outlook Update, July 2023, *National Bureau of Statistics (NBS)

1.1.2 Inflation
Global inflation decelerated during the first half of 2023, mainly reflecting the tight monetary
policy stance of most central banks, as well as the moderation in the prices of several
commodities. Inflation in the AEs was expected to decline to 4.7 per cent, from 7.3 per cent
in 2022, owing to the tight monetary and financial conditions as well as falling energy and
commodity prices in these countries. Inflation in the US, UK and euro area was envisaged
to trend downward in 2023. However, inflation in Japan was estimated to accelerate to 2.7
per cent in 2023, from 2.5 per cent in the preceding year, driven largely by the rising costs
of food and raw materials, coupled with the weakening of the Japanese yen.

In the EMDEs, inflation was expected to decelerate to 8.6 per cent in 2023, from 9.8 per
cent in 2022. However, inflation in the Middle East and Central Asia, was anticipated to
accelerate to 15.9 per cent in 2023, from 14.3 per cent in 2022. Similarly, inflation in SSA
was expected to be driven mainly by exchange rate pressures, rising energy and food
prices, as well as infrastructural deficits, but estimated to moderate to 14.0 per cent in 2023,
from 14.5 per cent in 2022.


FINANCIAL STABILITY REPORT – JUNE 2023

Figure 1.2 Global Inflation

Source: WEO Update, July 2023

Table 1.2: Global Inflation

Advanced Economies

United States

Euro Area

Japan

United Kingdom

Emerging Market and Developing Economies

Middle East and Central Asia

Sub-Saharan Africa

Source: WEO Update, July 2023

1.1.3 Oil Prices
Crude oil prices declined in the first half of 2023 owing, mainly to the weak macroeconomic
outlook in key oil consuming countries and sustained oil production by Russia.


Advanced Economies
United States
Japan
Euro Area
United Kingdom
Emerging Market and Developing Economies
Middle East and Central Asia
Sub-Saharan Africa
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 1.3: Oil Prices (US$ per barrel)


Table 1.3: Oil Prices (US$ Per Barrel)
Selected Crudes
End-Dec

EndDec

EndDec

EndDec

End-Jun

EndDec

EndJun

West Texas Intermediate (WTI)

Brent

OPEC Basket

Bonny Light

Source: OPEC and Reuters


1.1.4 International Stock Markets
The global stock market was generally bullish in the first half of 2023, driven largely by a
more favourable outlook for economic data, anticipated peaking of policy rates and further
moderation in headline inflation in most AEs. (Figure 1.4 and Appendix 1).

End Dec. 2018
End Dec. 2019
End Dec. 2020
End Dec. 2021
End Jun. 2022
End-Dec. 2022
End Jun. 2023
Bonny Light
OPEC Basket
Brent
West Texas Intermediate (WTI)
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 1.4 Indices of African Stock Markets


Figure 1.5 Indices of North American Stock Markets


Figure 1.6 Indices of South America Stock Markets


End-Dec 2020
End-Dec 2021
End-June 2022
End-Dec 2022
End-June 2023
Nigeria NGX All-Share Index
South Africa JSE All-Share Index
Kenya Nairobi NSE 20 Share index
Egypt EGX CASE 30
Ghana GSE All-Share Index

End-Dec 2020
End-Dec 2021
End-June 2022
End-Dec 2022
End-June 2023
US S&P 500
Canada S&P/TSX Composite
Mexico Bolsa

End-Dec 2020
End-Dec 2021
End-June 2022
End-Dec 2022
End-June 2023
Brazil 'Bovespa Stock
Argentina 'Merval
Columbia COLCAP
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 1.8 Indices of Asia Stock Markets


1.1.5 Foreign Exchange Markets
The foreign exchange markets recorded mixed developments in the first half of 2023. The
US dollar appreciated against most currencies in Africa and Asia, due, largely to the persistent hike in policy rate by the Federal Reserve, as well as the negative investor sentiments induced by weak macroeconomic conditions in these regions. In Nigeria, the sharp
depreciation was caused by the modification in the operations of the domestic foreign exchange market, particularly the removal of foreign exchange market segmentation. However, the US dollar depreciated against most currencies in North America, South America,
and Europe following the stronger growth performance, cheaper cost of funds and improved
trade balance in these regions.


End-Dec 2020
End-Dec 2021
End-June 2022
End-Dec 2022
End-June 2023
UK FTSE 100
France CAC 40
Germany DAX

End-Dec 2020
End-Dec 2021
End-June 2022
End-Dec 2022
End-June 2023
Japan NIKKEI 225
China Shanghai SE A
India BSE Sensex
Figure 1.7 Indices of Europe Stock Markets
FINANCIAL STABILITY REPORT – JUNE 2023

Table 1.4: Performance of Selected Currencies against the US Dollar
Country
Currency
End-Dec
2021 (1)

End-December
2022 (2)
End-June
2023 (3)
% Change (3) & (2)

Africa
South Africa
Rand

Kenya
Shilling

Egypt
Pound

Ghana
Cedi

Nigeria
Naira

770.88
-67.58
North America
Canada
Dollar

Mexico
Peso

South America
Brazil
Real

Argentina
Peso

Colombia
Peso

Europe
UK
Pound

Euro Area
Euro

Russia
Ruble

Asia
Japan
Yen

China
Renminbi

India
Rupee

PTP=Period to Period; YTD = Year to Date
Source: Bloomberg

1.1.6 Monetary Policy Rates
Monetary policy stance was mixed across various countries. In some economies, inflation
moderated during the review period, while it remained well above targets for many others,
thereby necessitating further tightening in policy rates. However, a few central banks maintained their policy rates (Appendix 2).

1.2 Domestic Macroeconomic Developments
1.2.1 Output
The domestic economy sustained its positive growth trajectory in the first half of 2023,
though at a slower pace relative to the level in the preceding half year. Output grew by 2.41
per cent in the first half of 2023, compared with 2.91 per cent in the second half of 2022.


FINANCIAL STABILITY REPORT – JUNE 2023

Figure 1.9 Gross Domestic Product (Growth %)

Source: National Bureau of Statistics

The non-oil sector remained the major driver of growth, contributing 2.97 percentage points
in the first half of 2023, owing, largely to the performance of the Services and Agriculture
sectors. The oil sector continued to be a drag on growth, notwithstanding its modest improvement in the review period. The sector contracted by 8.70 per cent, compared with
18.66 per cent in the preceding half year. Thus, the sector contributed negative 0.56 percentage point to the growth in real GDP, compared with 1.17 percentage points in the second half of 2022. The narrowed contraction was due to the renewed efforts to tackle vandalism and crude oil theft.

An analysis of the relative sectoral contributions to real GDP growth indicated that the Services sector maintained its lead over others, contributing 2.49 percentage points. This was,
however, lower than the 3.30 percentage points recorded in the preceding half year. The
sustained performance of the services sector was driven mainly by the growth in ICT and
finance & insurance subsectors. The Agriculture sector contributed 0.07 percentage point
to the real GDP growth, though lower than the 0.48 percentage point achieved in the preceding half year. The relative decline in the contribution of the Agriculture sector was attributed to weak performance in fishery and livestock activities. The Industry sector recorded negative contribution of 0.76 percentage point, compared with 4.52 percentage
points, recorded in the preceding half year.

Table 1.5: Sectoral Contributions to real GDP


Source: National Bureau of Statistics

H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
PER CENT
Sector
End-Jun 2022
End-Dec 2022
End-Jun 2023
Agriculture
0.50
0.48
0.07
Of which: Crop Production
0.45
0.48
0.38
Industry
-1.05
-0.87
-0.15
Of which: Oil
-1.64
-1.17
0.56
Manufacturing
0.42
0.04
0.18
Services
3.87
3.30
2.49
Of which: ICT
1.49
1.54
1.63
Finance & Insurance
0.78
0.41
1.05
Real GDP Growth
3.32
2.91
2.41
FINANCIAL STABILITY REPORT – JUNE 2023

1.2.2 Inflation
Inflation maintained an uptrend in the first half of 2023, with increases in the indices of both
food and non-food components of the Consumer Price Index (CPI) basket. Headline inflation (year-on-year) rose to 22.79 per cent at end-June 2023, above 21.34 per cent at endDecember 2022. The increase was driven largely by the legacy structural factors, exacerbated by election-related spending in the first quarter of 2023 and the removal of fuel subsidy, as well as the recent reforms in the foreign exchange market.
Figure 1.10 Inflationary Trend (Year-on-Year)

Source: National Bureau of Statistics

Food inflation (year-on-year) rose to 25.25 per cent, from 23.75 per cent in the second half
of 2022, driven largely by the persistent security challenges and flooding that disrupted
farming activities in some parts of the country as well as the increases in the prices of
imported food items. Core inflation also rose to 20.27 per cent, compared with 18.49 per
cent in the second half of 2022, which was due, mainly to elevated prices of imported items
and other legacy structural factors.

1.2.3 Fiscal Operations of the Federal Government
Provisional data on the Federal Government retained revenue at ₦2,881.56 billion, in the
first half of 2023, fell short of the prorated target by 47.82 per cent, reflecting protracted
revenue challenges. Similarly, provisional aggregate expenditure at ₦6,834.20 billion fell
below the prorated budget benchmark by 37.38 per cent. However, aggregate expenditure
increased by ₦303.89 billion or 4.0 per cent, compared with the level in the preceding period, reflecting increased capital spending. Consequently, overall fiscal deficit increased to
₦3,952.64 billion, from ₦3,190.28 billion in the second half of 2022.


END-DEC 2021
END-JUN 2022
END-DEC 2022
END-JUN 2023
Per cent (%)
Headline (Y-on-Y)
Core (Y-on-Y)
Food (Y-on-Y)
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 1.11 Federal Government Fiscal Operations (N Billion)

Source: OAGF & CBN Staff Estimates

The financing gap resulting from the mismatch between revenue and expenditure was
bridged by borrowing from domestic and external sources. Thus, the consolidated public
debt stock at end-June 2023 stood at ₦87,379.40 billion, an increase of 88.93 per cent over
the level at end-December 2022, representing 39.50 per cent of GDP, which was within the
Medium-Term Debt Management Strategy (MTDS) threshold of 40.00 per cent. A breakdown of the total debt indicated that domestic and external debt accounted for 61.95 per
cent and 38.05 per cent, respectively.

1.2.4 External Reserves
Gross external reserves at end-June 2023 decreased to US$33.71 billion, from US$36.61
billion at end-December 2022. A breakdown of the reserves indicated that the CBN, FGN
and Federation holdings were US$28.99 billion, US$4.72 billion and US$654,482.86, representing 85.98, 14.02 and 0.00 per cent, respectively. Further analysis showed that 74.49
per cent of the reserves was held in US dollars, 14.89 per cent in SDRs, 9.39 per cent in
Renminbi and 1.24 per cent in other currencies.
Total inflow to the external reserves was US$12.58 billion at end-June 2023, reflecting a
decrease of 6.75 per cent, compared with US$13.49 billion at end-December 2022. The
decline in total inflow was attributed, largely to the decreases in receipts from third-party
funds, inflow from crude oil-related taxes, and purchase of foreign exchange by the Bank.
Total outflow also decreased by 5.17 per cent to US$15.22 billion at end-June 2023, from
US$16.05 billion at end-December 2022. This was driven largely by decreases in thirdparty payments and intervention at the Investors and Exporters (I&E) window.


2021 first half
2021 second half
2022 first half
2022 second half
2023 first half
₦' Billion
Retained Revenue
Aggregate Expenditure
Overall Balance
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 1.12 External Reserves Position (US$ Billions)


Table 1.6: Foreign Exchange Flows through the CBN (US$ Billion)


Jun-22
Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23
US$' BILLION
Period
Inflow
Outflow
Net flow
End-Jun 2022
16.40
16.89
(0.49)
End-Dec 2022
13.49
16.05
(2.56)
End-Jun 2023
12.58
15.22
(2.64)
FINANCIAL STABILITY REPORT – JUNE 2023

DEVELOPMENTS IN THE FINANCIAL SYSTEM
2.1 Monetary and Credit Developments
Reserve money grew by 8.15 per cent at end-June 2023, driven by the increase in liabilities
to Other Depository Corporations (ODCs). The rise in liabilities to ODCs was due to the
18.84 per cent increase in required reserves. Currency-in-circulation (CIC) contracted by
13.57 per cent. A disaggregation of CIC revealed a decline in the value of notes and coins
by 13.74 per cent to ₦2,596.11 billion and a 180.80 per cent increase in eNaira transactions
to ₦7.16 billion. The significant growth in eNaira transactions and the decline in notes and
coins reflected increased shift towards digital transactions and adoption of electronic payment channels, attributed, largely to the implementation of the Naira Redesign Policy.

Table 2.1: Components of Reserve Money (N Billion)

June-22
Dec-22
June-23
Reserve Money
13,860.27
16,032.96
17,339.25
Currency-In-Circulation
3,255.56
3,012.06
2,603.27
Of which Naira Notes & Coins
3.254.21
3.009.51
2,596.11
eNaira
1.35
2.55
7.16
Liabilities to ODCs
10,604.71
13,020.91
14,735.98
Reserve Money (% Growth over Preceding
December)
5.74
20.59
8.15

Broad money (M3), at end-June 2023 grew by 24.39 per cent, implying an annualised
growth of 48.78 per cent, compared with the provisional benchmark of 28.21 per cent. The
growth in M3 was driven by the 59.58 per cent and 31.22 per cent increases in net foreign
assets (NFA) and domestic claims, respectively. The growth in domestic claims resulted
from the combined effect of the 39.82 per cent and 26.60 per cent rise in net claims on
central government and claims on “Other sectors”, respectively.


Table 2.2: Growth Rates of Monetary Aggregates
% Change (Over preceding December)
End-Dec

End-Jun

End-Dec

End-Jun

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

FINANCIAL STABILITY REPORT – JUNE 2023

Narrow Money Supply (M1)

Other Deposits

Monetary Liabilities (M2)

Total Monetary Liabilities (M3)


The growth in total monetary liabilities was traced to the 22.20 per cent and 28.49 per cent
increases in transferable deposits and other deposits, respectively. The growth in ‘other
deposits’ resulted from the rise in foreign currency deposits, which grew by 72.28 per cent,
following the modifications in the operations of the foreign exchange market in June 2023.
‘Other deposits’ contributed 13.70 percentage points to the growth in broad money liabilities, while transferable deposits accounted for 7.74 percentage points. Currency outside
depository corporations (CODC), on the other hand, declined by 11.91 per cent, reflecting
increased adoption and usage of electronic payment channels in response to the Naira
Redesign Policy of the Bank.

2.1.1 Market Structure of the Banking Industry
During the review period, the banking system remained competitive as the concentration in
terms of deposits and assets of the five largest banks (CR5) moderated to 64.10 per cent
and 62.68 per cent from 68.60 per cent and 69.00 per cent, respectively, in the preceding
half year. In addition, the share of individual banks in total deposits and assets ranged from
0.13 per cent to 15.20 per cent and 0.44 per cent to 17.55 per cent, respectively.
Similarly, the Herfindahl-Hirschman Indices (HHI) of 973.70 in deposits and 981.80 in assets (on a scale of 100 to 10,000) suggested the existence of competition in the banking
system.

Figure 2.1 Concentration Ratios of the Banking Industry Assets and Deposits


Dec 21
Jun-22
Dec 22
Jun 23
HHI
Concentration Ratio
CR(Deposits)
CR( Assets)
CR( Largest-Deposits)
CR (Largest-Assets)
HHI (Deposits) (rhs)
HHI (Assets) (rhs)
FINANCIAL STABILITY REPORT – JUNE 2023

2.1.2 Sectoral Distribution of Credit
Credit allocation to the critical sectors of the economy increased considerably during the
review period, largely on account of the Bank's initiatives, particularly the continued implementation of the Loan-to-Deposit Ratio (LDR) policy. Furthermore, the revaluation of foreign credit to critical sectors boosted credit growth in the review period. Total credit to key
sectors of the economy increased by 27.28 per cent to ₦37,479.37 billion at end-June 2023,
compared with ₦29,445.87 billion at end-December 2022. Credit utilisation across all the
sectors increased, as credit to Agriculture, Industry and Services sectors rose by 1.49 per
cent, 35.11 per cent and 24.21 per cent, respectively. A further disaggregation of the sectoral credit utilisation revealed that the Services sector, at ₦19,326.09 billion, accounted for
the largest share (51.6 per cent), followed by Industry (₦16,313.85 billion) and Agriculture
(₦1,812.47 billion), which accounted for 43.53 per cent and 4.91 per cent, respectively.

Table 2.3: Sectoral Credit Allocation
ITEM
Jun-22
Dec-22
Jun-23
Percentage Share in Total
% Change Between
₦’’Billion
₦’’Billion
₦’’Billion
Jun-22
Dec-22
Jun-

(1) &
(2)
(2) &
(3)
SECTORAL CREDIT
ALLOCATION

[a] Agriculture

[b] Industry


of which Manufacturing

[c] Services

of which Finance, Insurance
& Capital Market

Trade/General Commerce

TOTAL PRIVATE SECTOR
CREDIT
26,846.40
29,445.87
37,479.37

10.12
9.68

2.1.3 Consumer Credit
Consumer credit increased by 13.74 per cent to ₦2,637.32 billion above ₦2,318.63 billion
in the preceding half year. This development could be attributed to the rising cost of goods
and services. The total claims on the private sector stood at ₦37,479.37 billion at end-June
2023, of which consumer credit accounted for 7.04 per cent, relative to 7.87 per cent in the
preceding half year. A disaggregation of consumer credit showed that personal and retail
loans accounted for 71.78 and 28.22 per cent, compared with 75.56 and 24.44 per cent,
respectively, at end-December 2022.

FINANCIAL STABILITY REPORT – JUNE 2023

Figure 2.2 Consumer Credit


2.2 Other Financial Institutions
The total number of Other Financial Institutions (OFIs) decreased to 6,536 at end-June
2023, from 6,707 at end-December 2022. The Bank revoked 184 licenses of insolvent institutions, namely: 2 Primary Mortgage Banks (PMBs); 3 Finance Companies (FCs); and
179 Microfinance Banks (MFBs). However,13 new institutions, comprising 2 FCs and 11
MFBs were licensed, while 4 Unit Tier 2 MFBs were upgraded to Unit Tier 1.
Table 2.4: Composition of Other Financial Institutions
S/N
Type
End-Dec. 2022
End-Jun 2023

Microfinance Banks:
National
State
Tier 1 Unit
Tier 2 Unit

Bureaux De Change
5,675
5,675

Finance Companies

Development Finance Institutions

Primary Mortgage Banks

Total
6,707
6,536

The total assets of OFIs, excluding BDCs, rose by 2.19 per cent to ₦6,377.01 billion at endJune 2023, due, mainly to increase in placements and net loans & advances by 16.24 per
cent and 2.85 per cent, respectively. On the liability side, borrowings and ‘due to other
banks’ increased by 25.54 per cent and 194.45 per cent, respectively, while shareholders’

Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
₦'Billion
Percent (%)
Ratio of consumer credit to claims on private sector (lhs)
Consumer credit (rhs)
FINANCIAL STABILITY REPORT – JUNE 2023

funds increased by 31.69 per cent to ₦976.98 billion at end-June 2023, owing, mainly to
capital injection by DFIs and MFBs as well as accretion to the reserves of DFIs and PMBs.

Figure 2.3 OFIs Asset to GDP (Annualised)


Figure 2.4 Consolidated Balance Sheet of OFIs


Figure 2.5 Total Assets Structure of OFIs


Jun-20
Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
Per cent (%)

Total Assets of OFIs at End-Dec 2022
DFI
PMB
FC
MFB

Total Assets of OFIs at End- Jun 2023
DFI
PMB
FC
MFB


N'Billions
Assets
Dec-22
Jun-23


N'Billions
Liabilities
Dec-22
Jun-23
FINANCIAL STABILITY REPORT – JUNE 2023

2.2.1 Development Finance Institutions
The total assets of the sub-sector increased by 3.77 per cent to ₦3,916.78 billion at endJune 2023, reflecting an increase of 16.13 per cent and 6.78 per cent in placements and
net loans and advances, respectively. The growth in assets was driven largely by increase
of 66.72 per cent, 28.86 per cent and 26.37 per cent in paid up capital, reserves, and
borrowings, respectively. Three of the seven DFIs (Bank of Industry, Development Bank
of Nigeria and Federal Mortgage Bank of Nigeria) accounted for 89.76 per cent of the total
assets.
The shareholders’ funds increased by 47.48 per cent to ₦716.45 billion at end-June 2023,
compared with the level in the preceding period, arising from capital injection and accretion
to reserves. Similarly, Capital Adequacy Ratio (CAR) increased to 17.83 per cent at endJune 2023, above 15.66 per cent at end-December 2022.
The Liquidity Ratio (LR) decreased to 183.74 per cent at end-June 2023, from 202.23 per
cent at end-December 2022. Furthermore, the non-performing loans ratio improved by 2.41
percentage points to 23.51 per cent, from 25.92 per cent at end-December 2022.
Figure 2.6 Consolidated Balance Sheet of DFIs


N'Bn
Assets
Dec-22
Jun-23
-600
-300


N'Bn
Liabilities
Dec-22
Jun-23
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 2.7 Total Assets of DFIs


Figure 2.8 Total Liabilities of DFIs

2.2.2 Primary Mortgage Banks
The total assets of the sub-sector decreased by 2.53 per cent to ₦523.48 billion at endJune 2023, owing mainly to decreases in net loans & advances and investments.
However, the shareholders’ funds increased by 18.93 per cent to ₦41.86 billion arising
from accretion to reserves, while the paid-up capital decreased by 9.85 per cent to
₦101.18 billion due to the revocation of the licences of two PMBs.
Investible funds available to the PMB sub-sector at end-June 2023 amounted to ₦41.68
billion, sourced largely from recovery of investments and reduction in loans and advances.
These funds were mainly utilised to repay “other liabilities” and long-term loans.
The LR increased to 51.06 per cent at end-June 2023, compared with 43.13 per cent in
the preceding half year. The high LR was attributed to difficulties in creating mortgage

End- Dec. 2022
Cash & Bank Balances
Placements
Investment
Net Loans & Advances
Other Assets
Fixed Assets
Cash & Bank
Balances

Other Assets
2.04%
Fixed Assets
2.29%
End- Jun. 2023
Cash & Bank Balances
Placements
Investment
Net Loans & Advances
Other Assets
Fixed Assets
6.54%
15.90%
Due to
Banks
0.04%
9.87%
Long-term
Liabilities
1.46%
End- Dec. 2022
Paid-up Capital
Reserves
Deposits
Borrowings
Due to Banks
Other Liabilities
Cash & Bank
Balances
0.41%
35.06%
44.00%
Other
Assets
2.04%
Fixed
Assets
2.29%
End- Jun. 2023
Cash & Bank Balances
Placements
Investment
Net Loans & Advances
FINANCIAL STABILITY REPORT – JUNE 2023

loans owing to complex land title procedures and the weak foreclosure mechanism in Nigeria. However, NPL ratio decreased to 21.08 per cent at end-June 2023, following the
intensive debt recovery drive.
Figure 2.9 Consolidated Balance Sheet of PMBs (N'BN)

Figure 2.10 Composition of Assets of PMBs


End-Dec. 2022
Cash & Short-Term Funds
Investment
Net Loans & Advances
Other Assets
Fixed Assets

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


FINANCIAL STABILITY REPORT – JUNE 2023

Figure 2.11 Composition of Liabilities of PMBS


Table 2.5: Financial Highlights of PMBs

End-Dec 2022
(N’ billion)
End-Jun 2023
(N’ billion)
Change
(N’ billion)
% Change
Total Assets

Net Loans and Advances

Investments

Other Assets

Cash and Short-Term Funds

Reserves

Deposit liabilities

Other liabilities

Long-term Liabilities

Shareholders’ funds

Capital Adequacy Ratio (%)

Liquidity Ratio (%)

Non-performing Loans (%)


Paid-up
Capital,
20.90%
Reserves,
-14.34%
Deposits,
33.88%
Due to
Banks,
4.64%
Long-term
Liabilities,
15.74%
Other
Liabilities,
39.19%
End- Dec. 2022
Paid-up
Capital,
19.33%
Reserves,
-11.33%
Deposits,
35.02%
Due to
Banks,
4.17%
Long-term
Liabilities,
14.98%
Other
Liabilities,
37.83%
End- Jun. 2023
FINANCIAL STABILITY REPORT – JUNE 2023

Table 2.6: Sources and Applications of Investible Funds of PMBs

₦’m
₦’m
Source
Utilization
Cash

1,694
Bank Balances

4,141
Placements

Investments
7,058

Loans And Advances
15,530

Other Assets

2,588
Fixed Assets

Paid-Up Capital

11,056
Reserves
17,721

Deposits
1,376

Borrowings


Due To Other Banks

3,087
Other Liabilities

12,405
Longterm Liabilities

6,142
Total
41,685
41,684

2.2.3 Finance Companies
The total assets of Finance Companies (FCs) increased by 14.08 per cent to ₦475.62 billion, at end-June 2023, due, largely to increases in net loans & advances and placements.
The shareholders’ funds, decreased by 20.62 per cent to ₦30.61 billion, while CAR decreased to 5.79 per cent at end-June 2023, owing to operational losses.
Investible funds available to the sub-sector at end-June 2023 amounted to ₦69.80 billion,
sourced predominantly from borrowings and other liabilities, which were utilised mainly for
investments and creation of loans & advances.
{{{{{
The NPLs of the subsector decreased to 12.72 per cent at end-June 2023, which reflected
an improvement in loan repayment and asset quality.

Table 2.7: Financial Position of FCs


End-Dec 2022
(N’ billion)
End-June 2023
(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

Shareholder’s Funds

FINANCIAL STABILITY REPORT – JUNE 2023

Paid-up Capital

Reserves

Capital Adequacy Ratio (%)

Non-performing Loans (%)


Figure 2.12 Consolidated Balance Sheet of FCs


Figure 2.13 Composition of Assets of FCs


Cash & Bank
Balances, 7.29%
Placements,
11.90%
Investments,
3.45%
Net Loans &
Advances,
49.03%
Other Assets,
16.85%
Fixed Assets,
11.48%
End- Dec. 2022
Cash & Bank
Balances, 6.71%
Placements,
11.88%
Investments,
4.02%
Net Loans &
Advances,
51.69%
Other Assets,
14.83%
Fixed Assets,
10.87%
End- Jun. 2023

Assets
Dec-22
Jun-23

Liabilities
Dec-22
Jun-23
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 2.14 Composition of Liabilities of FCs


Table 2.8: Sources and Applications of Investible Funds of FCs
₦’m
₦’m
Source
Utilization
Cash

Bank Balances

2,159
Placements

6,908
Investments

4,723
Loans And Advances

41,448
Other Assets

Fixed Assets

3,867
Paid-Up Capital
2,468

Reserves

10,421
Deposits


Borrowings
46,337

Due To Other Banks


Other Liabilities
20,199

Long term Liabilities

Total
69,798
69,797

2.2.4 Microfinance Banks
The total assets of MFBs decreased by 3.37 per cent to ₦1,461.14 billion, at end-June
2023, following the revocation of some licences, which reduced the value of net loans &
advances, investments, cash and bank balances.
The shareholders’ funds increased by 5.75 per cent to ₦188.05 billion at end-June 2023,
due to capital injection to meet the new minimum capital requirements.
The CAR and LR of 16.09 and 76.51 per cent at end-June 2023 remained above the minimum regulatory requirements of 10 and 20 per cent, respectively. However, the PortfolioAt-Risk (PAR) increased marginally by 1.47 percentage points to 12.72 per cent at endJune 2023.
Paid-up
Capital, 6.36%
Reserves,
2.89%
Borrowings
61.01%
Long-term
Liabilities,
0.83%
Other
Liabilities,
28.91%
End- Dec. 2022
Paid-up
Capital, 6.10%
Reserves,
0.34%
Borrowings
63.22%
Long-term
Liabilities,
0.76%
Other
Liabilities,
29.59%
End- Jun. 2023
FINANCIAL STABILITY REPORT – JUNE 2023

Investible funds available to the subsector at end-June 2023 amounted to ₦228.99 billion,
sourced mainly from borrowings, repayment of loans & advances and capital injection. The
funds were utilised mainly to redeem part of the long-term liabilities, reduce ‘other liabilities’,
and meet customers’ deposit withdrawals.
Table 2.9: Highlights of Financial Position of MFBs


End-December

(N’ Billion)
End-June 2023
(N’ Billion)
Change
(N’ Billion)
% Change

Total Assets

Placements with Banks

Net Loans and Advances

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) (%)


Figure 2.15 Balance Sheet of MFBs

1,000
1,050
1,100
Assets
Dec-22
Jun-23

Liabilities
Dec-22
Jun-23
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 2.16 Composition of Assets of MFBs


Figure 2.17 Composition of Liabilities of MFBs


Table 2.10: Sources and Applications of Investible Funds of MFBs
₦’m
₦’m
Source
Utilisation
Cash

1,460
Bank Balances
34,293

Placements

30,580
Investments
3,904

Loans And Advances
45,616

Other Assets

3,095
Fixed Assets
2,281

Paid-up Capital
17,370

Reserves

11,612
Deposits

40,747
Borrowings


Due To Other Banks
125,533

Other Liabilities

112,079
Long-term Liabilities

29,424
Total
228,997
228,997
Cash & Bank
Balances
12.88%
Placements
9.29%
Investment
2.54%
Net Loans &
Advances
68.18%
Other Assets
5.02%
Fixed Assets
2.09%
End- Dec. 2022
Cash & Bank
Balances...
Placements
11.70%
Investment
2.36%
Net Loans &
Advances
67.45%
Other Assets
5.41%
Fixed Assets
2.00%
End- Jun. 2023
Paid-up
Capital,
7.76%
Reserves,
4.30%
Deposits,
33.57%
Takings from
Other Banks,
2.41%
Long-term
Liabilities,
40.01%
Other
Liabilities,
11.95%
End- Dec. 2022
Paid-up
Capital, 9.22%
Reserves,
3.66%
Deposits,
31.95%
Takings from
Other Banks,
11.09%
Long-term
Liabilities,
39.40%
Other
Liabilities,
4.69%
End- Jun. 2023
FINANCIAL STABILITY REPORT – JUNE 2023

2.2.4.1 Maturity Structure of Loans and Advances and Deposit Liabilities
The deposit structure of MFBs remained largely short-term, as deposits of less than one
year maturity accounted for 84.51 per cent, while deposits of over one year maturity accounted for 15.49 per cent. However, the maturity profile of loans & advances at end-June
2023 showed that long-term credits dominated the microfinance market, accounting for
57.63 per cent, while short-term credits accounted for 42.37 per cent. Although, this indicated a mismatch of deposits and credits maturity, this has been mitigated by high liquidity
ratio.

Table 2.11: Maturity Structure of MFBs Loans and Advances and Deposit Liabilities
End-Dec 2022
End-Jun 2023
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

2.3 Financial Markets
The global financial markets continued to face downside risks as reflected by high inflation,
slower economic growth, global polarisations and the lingering effects of the RussiaUkraine crisis. Despite the pass-through effects of these headwinds to the domestic economy, the Nigerian financial market maintained its resilience due to the various policies of
the Bank towards ensuring price and financial system stability.

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 growth in unsecured transactions. In general, inter-bank money market rates
trended downward in the first half of 2023, compared with that of the preceding half of 2022.
Factors that impacted the market included fiscal flows, cash reserve ratio (CRR) maintenance operations, implementation of LDR, settlement for foreign exchange interventions,
maturities of central bank and treasury securities, open market operations, as well as operational changes to the foreign exchange market. In most parts of the review period, rates
remained within the bounds of the policy rate corridor in line with the tightening stance of
the Bank.

FINANCIAL STABILITY REPORT – JUNE 2023

On January 3, 2023, the open-buy-back (OBB) weighted daily average rate opened at 9.74
per cent and closed at 1.38 per cent on June 30, 2023, compared with 13.54 per cent on
July 4, 2022 and 10.74 per cent on December 30, 2022. During the review period, the daily
OBB rate ranged between 1.38 and 18.50 per cent, compared with 7.08 and 17.01 per cent
in the second half of 2022. In the unsecured segment of the market, the weighted daily
average rate opened at 9.50 per cent on January 3, 2023, lower than the 13.00 per cent
recorded on July 8, 2022. The unsecured inter-bank call rates ranged from 9.00 to 19.00
per cent in the review period, compared with 9.50 to 16.75 per cent, in the second half of
2023.

The monthly average OBB and inter-bank call rates closed at 9.12 per cent and 11.66 per
cent at end-June 2023, compared with 11.61 per cent and 12.08 per cent at end-December
2022.

Figure 2.18 Volatility in Open-Buy-Back Interest Rates


OBB Volatility - 2nd Half 2022

OBB Volatility - 1st Half 2023
3.65
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 2.19 Volatility in Interbank Interest Rates


Figure 2.20 Money Market Rates


2.3.1.2 Deposit and Lending Rates
The Bank continued its tightening policy stance in the first half of 2023, aimed at moderating
the persistent uptick in inflation, resulting in higher interest rates. Thus, both deposit and
lending rates trended upward in the review period as banks repriced rates in line with the
policy rate hikes. The weighted average term deposit rate rose by 2.76 percentage points
to 6.22 per cent. Similarly, the weighted average prime and maximum lending rates rose to
12.77 per cent and 28.26 per cent, respectively, compared with 11.90 per cent and 27.96
per cent in the preceding half-year.

Int. Bank Volatility - 2nd Half 2022

Int. Bank Volatility - 1st Half 2023
3.68
July '22
August
'22
Septem
ber '22
October
'22
Novem
ber '22
Decemb
er '22
January
'23
Februar
y '23
March
'23
April '23
May '23
June '23
Inter-Bank Call


Open Buy Back

MPR


18.5
18.5
SLF


19.5
19.5
SDF


11.5
11.5

Per cent
Inter-Bank Call
Open Buy Back
MPR
SLF
SDF
FINANCIAL STABILITY REPORT – JUNE 2023

However, the spread between the maximum lending rate and the weighted average term
deposit rate narrowed by 0.63 percentage point to 21.41 per cent in the review period, from
22.04 per cent in the preceding half-year, implying an improvement in the competitiveness
of the financial market.

Figure 2.21 Interest Rates Spread


2.3.1.3 Nigerian Treasury Bills
The value of the Nigerian Treasury Bills (NTBs) for 91-, 182- and 364-day tenors offered
and allotted in the first half of 2023 was ₦2,599.91 billion, an increase of 15.03 per cent,
above the level recorded in the preceding half-year. Total subscriptions increased by
113.53 per cent to ₦9,502.78 billion, reflecting the liquidity conditions in the market and
investors’ appetite for risk-free securities. The average stop rates were generally lower at
5.73, 9.10 and 15.64 per cent, compared with 9.20, 11.51 and 18.90 per cent for the 91day, 182-day and the 364-day tenors, respectively, in the preceding half-year.

Figure 2.22 Primary Market: Nigerian Treasury Bills Allotment (%)


Percent
Maximum Lending minus Weighted Average Time/Term Deposits rate
Maximum Lending minus Weighted Average Deposits rate(Demand, Saving, Time/Term)
N2,022.37bn;
42.82%
N55.57bn;
1.18%
N1,347.39bn
; 28.53%
N1,297.40bn;
27.47%
June, 2023
Banks
Merchant Banks
Parastatals
Mandate and Internal
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 2.23 Primary Market: NTBs Transactions at end-December 2022 and end-June 2023


The NTBs outstanding at end-June 2023 was ₦4,722.72 billion, compared with ₦4,422.72
billion at end-December 2022.

Figure 2.24 Holdings of NTBs Outstanding (Per cent and ₦’Billion)

2.3.2 Foreign Exchange Market
The total foreign exchange sales by the Bank in the first half of 2023 amounted to US$6.44
billion, compared with US$8.19 billion in the second half of 2022, reflecting a decrease of
20.92 per cent.

Jul-22 Aug-22Sep-22 Oct-22Nov-22Dec-22 Jan-23 Feb-23 Mar-

Apr-23 May-

Jun-23
per cent
N'Billion
Offer
Subscription
Maturities
Ave. Rates %
N 1,342.56 ,
30.36%
N
48.34 ,
1.09%
N 1,361.91 ,
30.79%
N 1,669.92 ,
37.76%
December 2022
Banks
Merchant Banks
Parastatals
Mandate and Internal
N2,022.37b
n; 42.82%
N55.57bn;
1.18%
N1,347.39b
n; 28.53%
N1,297.40b
n; 27.47%
June, 2023
Banks
Merchant Banks
Parastatals
Mandate and Internal
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 2.25 Sales at the Interbank Foreign Exchange Market

*Secondary Market Intervention Sales (SMIS). Small and Medium Enterprise (SME).

Furthermore, the Bank purchased US$900.19 million, resulting in net sales of US$4.24
billion in the first half of 2023, compared with US$655.53 million and US$5.78 billion, respectively, in the second half of 2022. Forwards contracts valued at US$5.68 billion matured, while US$4.88 billion was outstanding at end-June 2023. Forwards contracts
amounting to US$4.24 billion matured, while US$4.84 billion was outstanding in the preceding period.

2.3.2.1 Investors’ & Exporters’ Window
The rate at the Investors’ & Exporters’ (I&E) Window opened at ₦461.00/US$ on January
3, 2023 and closed at ₦769.25/US$ at end-June 2023, reflecting a depreciation of 66.87
per cent, compared with 7.91 per cent at end-December 2022. The huge depreciation during the review period was due largely to the reforms in the operations of the foreign exchange (FX) market, which included the collapse of all foreign exchange market segments
into the I&E window.

Figure 2.26 Monthly Average Rates at the I&E Window

SMIS/Special
Spot
Invisibles
SME
I&E
SMIS/ Special
Forwards
IOCs
US$ Million
End-December 2022
End-June 2023

Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23
Naira/USD
Months
FINANCIAL STABILITY REPORT – JUNE 2023

2.3.2.2 Over-the-Counter Foreign Exchange Futures
The notional amount of over-the-counter (OTC) FX Futures contracts executed and matured at end-June 2023 decreased to US$1.23 billion and US$0.17 billion, from US$2.61
billion and US$2.38 billion at end-December 2022, respectively. Thus, the outstanding contracts increased to US$6.79 billion at end-June 2023, from US$4.65 billion at end-December 2022.
2.3.2.3 Naira/Yuan Bilateral Currency Swap Agreement
A total of CNY0.76 billion was sold at end-June 2023, compared with CNY1.41 billion in the
preceding half year, bringing the total sales to CNY9.38 billion from inception. The CNY
market window has continued to facilitate business processes for Nigerian firms engaged
in direct trade with their Chinese counterparts and improved access to the Yuan in the
Nigerian foreign exchange market.
2.3.3 Capital Market
Activities in the Nigerian capital market were bullish in the first half of 2023 as indicated by
the performance of the equities, bonds and exchange-traded products segments. The positive performance reflected sustained investor confidence in the economy following the successful political transition and optimism over economic reforms by the new government.

2.3.3.1 New Issues of Securities
During the review period, there were 10 new issues valued ₦262.32 billion, comprising two
private placements (₦6.40 billion) and eight corporate bonds (₦255.92 billion), compared
with eight issues that comprised an initial public offering (₦10 billion) and seven corporate
bonds (₦267.73 billion), in the second half of 2022. Furthermore, 24 FGN Bonds were issued in the first half of 2023, compared with 18 in the second half of 2022.


Table 2.12: New Issues in the Capital Market
Type
Number of Issues
Value of Issues (N’Bn)
End-Dec

End-June

Change
%
End-Dec

End-Jun 2023
Change %
IPO


Public
Offer/Offer
for Sale


Private Placements
-

-
-
6.40
Rights Issue

Total Equities

10.00
6.40
-35.97
Corporate Bonds


Sub-national Bonds


FGN Bonds


Eurobond (415.58/$)

Total Debt


Total
(Equities
&
Debt)


Source: SEC, DMO
FINANCIAL STABILITY REPORT – JUNE 2023

2.3.3.2 Equities Market
The Nigerian Exchange Group All-Share Index (NGX ASI) and Market Capitalisation (MC)
trended upward. The NGX ASI rose by18.96 per cent to 60,968.27 points at end-June 2023.
Similarly, equity market capitalisation increased by 18.71 per cent to N33,203.45 billion at
end-June 2023.
2.3.4 Bond Market
Government and corporate debt market capitalisation increased by 15.20 per cent and
10.71 per cent to N 25,528.99 billion and N 1,173.51 billion, respectively, at end-June 2023.


Table 2.13: NGX ASI, Equity and Debt Market Capitalisation
Markets (N’Bn)
End-Jun 2022
End-Dec 2022
End-Jun 2023
Change (%)
NGX ASI

Equity Market Cap

Government Debt Market
Cap

Corporate Debt Market Cap

Source: NGX Reports

Table 2.14: Nigerian Exchange Limited Indices
Description
End-Dec 2021
End-Jun 2022
End-Dec 2022
End-Jun 2023
Change %
NGX Main-Board
Index

NGX 30 Index

NGX CG Index

NGX
Premium
Index

NGX Banking Index

NGX
PENSION
INDEX

NGX
Insurance
Index

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

FINANCIAL STABILITY REPORT – JUNE 2023

NGX Oil/Gas Index

NGX Lotus Islamic Index

NGX
Industrial
Index

NGX Growth Index

NGX
Sovereign
Bond Index

Source: NGX Reports

The total number of deals, volume and value of transactions on the NGX Exchange increased by 32.06 per cent, 170.75 per cent and 91.29 per cent, respectively, in the first half
of 2023.
The significant increase in the performance of the equities market is attributed to improved
investor confidence in anticipation of business-friendly policies by the new administration.
Table 2.15: NGX Deals, Volume and Value
Deals (000)
Volume (Million)
Value (N’m)
EndDec

End-Jun

Change
(%)

End-Dec

End-Jun

Change
(%)

End-Dec

End-Jun

Change
(%)

Government
Bonds-Federal
0.51
0.53
3.33


State & Local


-

Corporate
Bonds/Debentures*


Equities

Exchange
Traded
Products (ETPs)
0.68
1.58
132.35


Total

Source: NGX

2.3.4.1 Foreign and Domestic Portfolio Investments
Foreign Portfolio Investment (FPI) inflows totalled ₦95.04 billion, while divestments (outflows) stood at ₦123.00 billion, reflecting a net outflow of ₦27.96 billion in the first half of
2023. In comparison, inflows in the second half of 2022 amounted to ₦75.25 billion, while
divestments stood at ₦60.50 billion, reflecting a net inflow of ₦14.75 billion. Of the total
equity transactions, foreign portfolio transactions accounted for 15.03 per cent in the review
period, compared with 20.50 per cent in the preceding half year. Domestic transactions
accounted for the balance of 84.97 per cent, compared with 79.50 per cent in the preceding
period. The net outflow recorded during the review period reflected the cautious approach
adopted by foreign investors in anticipation of policy reforms by the new administration.

FINANCIAL STABILITY REPORT – JUNE 2023

Table 2.16: Foreign and Domestic Portfolio Participation in Equities Trading

Period
End-June

End-Dec 2022
End-June

Change %
(a)
(b)

(c)
(b&c)
Total Equities Transactions
(N'Billion)

1,505.53
662.22

1,451.11
119.13
Foreign Portfolio Transactions (N'Billion)

201.32
135.75

218.04
60.62
Foreign %

13.37
20.50

15.03
(26.68)
Domestic
Transactions
(N'Billion)

1,304.21
526.47

692.49
31.53
Domestic %

86.63
79.50

84.97
6.88
Foreign Inflow (N'Billion)

95.88
75.25

95.04
26.30
Foreign Outflow (N'Billion)

105.41
60.50

123.00
103.31
NSE ASI

51,817.59
51,251.06

60,968.27
18.96


2.3.4.2 National Association of Securities Dealers
The NASD Securities Index rose to 752.03 points at end-June 2023, compared with 709.66
points at end-December 2022. Similarly, the NASD over-the-counter (OTC) Market Capitalisation increased by 11.55 per cent to ₦1,040.26 billion in the first half of 2023.

Table 2.17: Transactions on the NASD OTC Market
OTC Market
End-Jun 2022
End-Dec 2022
End-Jun 2023
% Change
(Dec 22/Jun 23)
Unlisted Index
(Points)
763.24
709.66 752.03
5.97
Market Cap
(N’Bn)

Deals
1,474.00
1,232.00 1,733.00
40.67
Volume ('000)

Value (N'000)
21,275,895.12
6,746,124.67 29,112,146.99
331.54
Source: NASD

2.3.4.3 Commodities Market
Trading activities on the commodities exchanges were low as transactions occurred on only
three out of the five exchanges in the review period.

FINANCIAL STABILITY REPORT – JUNE 2023

2.3.4.4 AFEX Commodities Exchange
The volume and value of transactions on the AFEX Commodities Exchange increased by
138.71 per cent and 137.84 per cent to 339.97 million kilogram (kg) and ₦113.59 billion,
respectively, compared with the levels at end-December 2022.

Table 2.18: Transactions on AFEX (N’M)
H2 2022
H1 2023
H2

H1

H2 2022
H1 2023

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

Cocoa

Ginger

Maize

Paddy
Rice

Sesame

Sorghum

Soyabean

Total


2.3.4.5 Prime Commodity Exchange
There was no trading activity on this Exchange during the review period.

2.3.4.6 Gezawa Commodity Market and Exchange
There was no trading activity on this Exchange during the review period.
Table 2.19: Gezawa Commodity Market and Exchange (GCMX) Transactions
Product
Maize
Soybeans
Grand Total (N’m)
Total Volume (Kg)
End-Jun 2022

End-Dec 2022

End-Jun 2023


2.3.4.7 Lagos Commodities and Futures Exchange
The Lagos Commodities and Futures Exchange traded a total volume of 1,304.06 metric
tonnes (MT) of Paddy Rice valued ₦438.41 million in the first half of the year.
A total of 43 grammes of “Eko Gold Coin” valued ₦1.97 million was traded in the first half
of 2023 as shown in the table below. The gold coin was the only commodity traded on the
exchange in 2022.

FINANCIAL STABILITY REPORT – JUNE 2023

Table 2.20: Lagos Commodities and Futures Exchange (LCFE) Transactions
Commodity
Volume

Value ₦ (‘M)


H2 2022
H1 2023
% change
H2 2022
H1 2023
% change
Eko Gold Coin (gms)


Paddy (MT)


2.3.4.8 Nigeria Commodity Exchange
The Nigeria Commodity Exchange traded a total volume of 12,887 MT of Maize valued
₦2.25 billion in the first half of 2023.

2.3.4.9 The Domestic Debt Market
The stock of domestic debt outstanding at end-June 2023 stood at ₦50.13 trillion, reflecting
an increase of 108.82 per cent over the ₦24.05 trillion at end-December 2022. The increase
was mainly attributed to the Federal Government of Nigeria (FGN) securitisation of preexisting Ways and Means Advances, new issuances of FGN Promissory Notes, NTBs, and
corporate bonds.
Table 2.21: Outstanding Debt Instruments (N’ billion)
Instruments
End-Dec 2022
End-June 2023
% Change
Proportion
of Total
(Dec 2022)
Proportion of
Total (June*
2023)
FGN Bonds

Nig. Treasury Bills

FGN Savings Bonds

FGN Sukuk

FGN Green Bond

Nig. Treasury Bonds

FGN Promissory Notes

Sub-National Bonds

Corporate Bonds

Sukuk- Sub-National
-
-
-
Green-Corporate Bond

TOTAL
24,005.15
50,128.66
108.82

2.3.4.10
Bonds – Primary Market
Total value of bonds outstanding at end-June 2023 stood at ₦44.63 trillion, reflecting an
increase of 131.62 per cent, compared with ₦19.27 trillion at end-December 2022.


FINANCIAL STABILITY REPORT – JUNE 2023

2.3.4.10.1
FGN Bonds
New issues and re-openings of FGN Bonds valued ₦2,160.00 billion were offered during
the review period, indicating an increase of 60.00 per cent from ₦1,350.00 billion auctioned
in the second half of 2022. Public subscriptions and sales increased to ₦4,163.94 billion
and ₦3,567.42 billion, in the first half of 2023, compared with ₦1,631.21 billion and
₦1,195.18 billion, respectively, in the second half of 2022.
The yield curve remained normal, reflecting investors’ expectations of increases in future
interest rates.
Figure 2.27 Yield Curve

Source: FMDQ-OTC Plc

2.3.4.10.2
FGN Savings Bonds
FGN savings bonds worth ₦6.28 billion, comprising 2-year and 3-year tenors were offered
and allotted in the review period, reflecting a decrease of 45.38 per cent from ₦9.13 billion
in the preceding half-year. The coupon rates for the 2-year and 3-year tenors ranged from
9.4750 to 10.3910 per cent and 10.4650 to 11.3910 per cent, respectively, relative to
ranges of 8.0750 to 12.4920 and 9.0750 to 13.4920 per cent in the preceding half-year.
Bond maturities amounted to ₦3.08 billion. Thus, the FGN Savings Bonds outstanding
stood at ₦30.70 billion at end-June 2023.

2.3.4.10.3
FGN Green Bonds
The outstanding stock of the bonds remained unchanged at ₦15.00 billion at end-June
2023, as in the preceding period.

2.3.4.10.4
FGN Sukuk
There was no issuance of FGN Sukuk in the review period. Thus, the value of FGN Sukuk
remained unchanged at ₦742.56 billion at end-June 2023, as in the second half of 2022.


FINANCIAL STABILITY REPORT – JUNE 2023

2.3.4.10.5
Sub-National Bonds
During the review period, sub-national bonds declined to ₦135.02 billion, from ₦144.30
billion at end-December 2022, following the redemption of ₦1.41 billion, and a partial redemption of ₦7.87 billion by two state governments.

2.3.4.10.6
Corporate Bonds
Corporate bonds valued ₦1,650.34 billion were outstanding at end-June 2023, compared
with ₦1,403.72 billion at end-December 2022. Corporate Bonds worth ₦14.52 billion were
redeemed, ₦18.47 billion matured, while the sum of ₦279.61 billion was issued during the
review period.

2.3.4.11
Bonds - Secondary Market
The S&P/FMDQ Nigeria Sovereign Bond Index and yield decreased by 1.12 per cent and
1.22 percentage points to 614.73 points and 7.78 per cent, respectively. The market capitalisation increased by 8.26 per cent to ₦29.89 trillion in the second half of 2022.

Table 2.22: FMDQ Market Size
S/N
SECTOR
End-Dec

End-Jun 2022
End-Dec 2022
End-Jun

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

FGN Bonds


Agency Bonds

0.05
-

State/Municipal Bonds


Corporate Bonds


Supranational Bonds

0.00
-

Sukuk


Green Bonds


Eurobonds


Short-Term Bonds


Treasury Bills


OMO Bills
2,051.79

17,717.60
-18.75

Commercial Papers


Total Market Size


2.3.4.12
Mutual Funds
The Net Asset Value (NAV) of registered funds stood at ₦1.98 trillion at end-June 2023,
indicating an increase of 30.46 per cent over the level recorded during the preceding period.
The increase was attributed to 104.76, 66.99, 33.81 and 27.72 per cent growth in Real
Estate Funds, Dollar Funds, Money Market Funds and Equity Based Funds, respectively.


FINANCIAL STABILITY REPORT – JUNE 2023

Table 2.23: Collective Investment Schemes (₦’Billion)
Fixed Income Funds
End-Jun 2022
End-Dec

End-Jun

Change
Change
Relative
Contributions (%)
(%)
(%)
(a)
(b)
(c)
(a&b)
(b&c)
end-Jun

Ethical Funds

Shariah Compliant
Funds

Dollar Fund

Bond Funds

Equity-Based Funds

Real Estate Funds

Money Market
Funds

Balanced-Based
Funds

Exchange Traded
Funds

Infrastructure Funds

Total


2.3.5 Other Developments
Other developments in the capital market during the review period included:
• The issuance of new AML/CFT regulations and guidelines by SEC, which mandated
Capital Market Operators (CMOs) to comply with more stringent reporting obligations to ensure the safety and security of the capital market, and to address the
deficiencies in the Nigeria’s Mutual Evaluation Report (MER). These included adoption of RBS by SEC, screening of clients against Nigeria’s sanction list by CMOs
before on-boarding, and continuous monitoring of clients, among others.

• The Supreme Court, on January 13, 2023, issued a judgement that affirmed the
Investments and Securities Tribunal’s (ISTs) jurisdiction over capital market disputes. The landmark judgement finally confirmed exclusive jurisdiction on the IST to
determine all issues listed in Section 284 of the ISA, 2007.


• The revised National Investors Protection Fund Rule was approved, thus, providing
a framework for payment of unclaimed monies paid into the Fund.

• The registration of five new FinTech companies as full-fledged market operators,
comprising two crowdfunding intermediaries, two digital sub-brokers, and one roboadviser.

• A total of 627 CMOs, representing 52.77 per cent of the total number of CMOs in
the SEC database, renewed their registration status.

FINANCIAL STABILITY REPORT – JUNE 2023

2.4 Real Sector Interventions
In line with its developmental mandate, the Bank sustained its interventions in the priority
sectors of the economy, which include agriculture, manufacturing/industry, micro, small and
medium enterprises, energy/infrastructure, health, and exports. The review period, however, recorded a slower pace in intervention as reflected by a 40.50 per cent reduction in
total disbursements, while repayments increased by 7.11 per cent, compared with the levels at the preceding period.
2.4.1 Agricultural Policy Support
2.4.1.1 Agricultural Credit Guarantee Scheme
A total of 10,304 loans valued ₦0.03 billion were guaranteed under the Scheme in the first
half of 2023, compared with 30,650 loans, valued ₦5.25 billion in the preceding period.
Also, 16,504 guaranteed loans valued ₦3.30 billion were repaid during the period, compared with 18,219 guaranteed loans valued ₦3.14 billion at end-December 2022.
2.4.1.2 Commercial Agriculture Credit Scheme
The sum of ₦2.00 billion was disbursed to one agro-enterprise in the first half of 2023, an
increase of 102.02 per cent, compared with the ₦0.99 billion disbursed to 11 beneficiaries,
in the second half of 2022. However, repayments decreased by 6.67 per cent from ₦43.61
billion in the second half of 2022 to ₦40.70 billion.
2.4.1.3 Anchor Borrowers’ Programme
In the first half of 2023, the sum of ₦37.90 billion was disbursed to 123,856 smallholder
farmers across the country to cultivate rice, maize, and wheat, compared with ₦103.72
billion disbursed to 245,361 smallholder farmers in the second half of 2022. This reflected
a decrease of 63.46 per cent in the amount disbursed. However, repayments increased by
20.16 per cent to ₦82.15 billion. Furthermore, a total of 175,282 hectares of land were
cultivated in the first half of 2023, compared with 529,478 hectares in the second half of
2022, indicating a decrease of 66.89 per cent.
2.4.1.4 Accelerated Agriculture Development Scheme
There was no disbursement in the period under review. However, a total repayment of
₦1.92 billion was recorded, reflecting a 17.07 per cent increase, over the sum of ₦1.64
billion recorded in the second half of 2022.
2.4.1.5 Paddy Aggregation Scheme
The sum of ₦4.50 billion was repaid in the period under review, compared with the sum of
₦1.00 billion in the second half of 2022, indicating an increase of 350.00 per cent. However,
no disbursement was made in the review period.
2.4.1.6 National Food Security Programme
The sum of ₦3.29 billion was repaid at end-June 2023, compared with ₦4.95 billion at endDecember 2022. There was no disbursement during the review period.
FINANCIAL STABILITY REPORT – JUNE 2023

2.4.2 Micro, Small and Medium Enterprises & Industrial Policy Support
2.4.2.1 Micro, Small and Medium Enterprises Development Fund
There was no disbursement in the period under review, compared with ₦0.01 billion disbursed to 130 beneficiaries at end-December 2022. Repayments declined by 75.98 per
cent to ₦1.22 billion at end-June 2023, from ₦5.07 billion at end-December 2022.
2.4.2.2 Agribusiness/Small and Medium Enterprises Investment Scheme
The sum of ₦4.19 billion was disbursed in the period under review, compared with ₦1.32
billion disbursed in the second half of 2022, reflenting an increase of 215.04 per cent. There
was no repayment in the first half of 2023, compared with ₦2.75 billion repaid in the preceding period.
2.4.2.3 Creative Industry Financing Initiative
There was no disbursement in the first half of 2023, compared with ₦0.17 billion disbursed
in the second half of 2022. The sum of ₦0.40 billion was repaid during the review period,
compared with ₦0.30 billion repaid in the preceding half-year.
2.4.2.4 Targeted Credit Facility
During the period under review, ₦0.03 billion was disbursed to 66 beneficiaries, compared
with ₦1.21 billion disbursed to 2,863 during the second half of 2022. The sum of ₦1.05
billion was repaid during the review period, compared with ₦0.82 billion repaid in the preceding period.
2.4.2.5 Tertiary Institutions Entrepreneurship Scheme
In the review period, the sum of ₦0.16 billion was disbursed to 41 beneficiaries, compared
with ₦0.06 billion to 20 beneficiaries in the preceding period.
2.4.3 Real Sector Policy Support
2.4.3.1 Real Sector Support Facility - Differentiated Cash Reserve Requirement
The sum of ₦114.12 billion was disbursed for 16 projects in the first half of 2023, compared
with ₦73.20 billion for 16 projects in the second half of 2022. The sum of ₦43.24 billion was
repaid during the review period, compared with ₦27.39 billion in the second half of 2022.
2.4.3.2 COVID-19 Intervention for the Manufacturing Sector
The sum of ₦83.65 billion was disbursed for 24 projects in the first half of 2023, compared
with ₦131.26 billion for 29 projects in the second half of 2022. The sum of ₦30.03 billion
was repaid during the period, compared with ₦7.95 billion in the second half of 2022.
2.4.3.3 Healthcare Sector Intervention Facility
There were no disbursements under this Facility in the period under review, compared with
₦12.28 billion disbursed for eight projects in the second half of 2022. The sum of ₦7.44
FINANCIAL STABILITY REPORT – JUNE 2023

billion was repaid in the period under review, compared with ₦6.53 billion in the preceding
period.
2.4.3.4 Textile Sector Intervention Facility
There was neither disbursement nor repayment in the first half of 2023, compared with
₦1.50 billion disbursed and ₦4.49 billion repaid in the preceding period.
2.4.3.5 CBN-BOI Industrial Facility
There was no release of funds under this Facility in the review period, compared with
₦50.00 billion released in the second half of 2022.

2.4.3.6 Presidential Fertilizer Initiative
There were no disbursements under this Initiative in the period under review. However,
repayments declined to ₦3.00 billion from ₦4.00 billion in the second half of 2022.

2.4.3.7 Intervention Facility for the National Gas Expansion Programme
There was no disbursement in the period under review, while the sum of ₦9.30 billion was
disbursed for two projects in the second half of 2022. No repayment was made in the period
under review as the facilities were still under moratorium.

2.4.3.8 Shared Agent Network Expansion Facility
There was no disbursement under this initiative in the period under review. However, the
sum of ₦0.85 billion was repaid in the first half of 2023, compared with ₦0.40 billion in the
second half of 2022, indicating an increase of 112.5 per cent.
2.5 Export Policy Support
2.5.1 Non-oil Export Stimulation Facility
There were no disbursements under the initiative in the period under review. However, the
sum of ₦4.08 billion was repaid in the first half of 2023, reflecting a decrease of 45.23 per
cent from the ₦7.45 billion in the preceding period.

2.5.2 Export Facilitation Initiative
There was neither disbursement nor repayment in the period under review. However, the
sum of ₦10.18 billion was released for three projects in the preceding period.

2.6 Energy Policy Support
2.6.1 Power and Airline Intervention Fund
The sum of ₦4.00 billion was disbursed under this initiative in the first half of 2023, while
there was no disbursement in the preceding period. The sum of ₦5.87 billion was repaid in
FINANCIAL STABILITY REPORT – JUNE 2023

the review period, compared with ₦4.37 billion in the second half of 2022, reflecting an
increase of 34.32 per cent.
2.6.2 Nigerian Electricity Market Stabilisation Facility
A total of ₦35.57 billion was disbursed compared with ₦63.64 billion in the second half of
2022. Also, the sum of ₦21.95 billion was repaid compared with ₦13.98 billion in the second
half of 2022, indicating an increase of 57.01 per cent in repayments.
2.6.3 Nigeria Bulk Electricity Trading – Payment Assurance Facility
All outstanding amounts have been fully repaid and there were no new disbursements in
the review period.
2.6.4 National Mass Metering Programme
The sum of ₦2.40 billion was disbursed in the first half of 2023, compared with ₦3.11 billion
in the second half of 2022, while ₦1.87 billion was repaid in the first half of 2023 as against
₦0.36 billion in the preceding period.
2.7 Institutional Support and Financial Inclusion
2.7.1 National Collateral Registry
Most of the performance indicators of the National Collateral Registry (NCR) trended downwards, indicating decreased lending against movable assets offered as collateral.
The number and Naira value of registered financing statements decreased by 25.87 and
18.73 per cent to 30,327 and ₦833.49 billion, respectively. The financing statements denominated in USD increased by 1,144.89 per cent to US$0.61 billion, compared with the
preceding period. The financing statements were registered by 49 financial institutions in
respect of 31,734 borrowers. In addition, searches conducted increased by 2.75 per cent
to 65,902.

Table 2.24: Transactions on the National Collateral Registry Portal
Debtor
Type
Number of Financing
Statements
Number of Borrowers
Currency
Value of Financing
Statements
(N‘ Billion)

End-Dec

End-Jun

End-Dec

End-Jun

End-Dec

End-Jun

Individual

(₦' billion)
829.15
445.65
Large Business

($' million)
0.00
30.00
(₦' billion)
95.34
168.07
($' million)
46.00
571.84
Medium
Business

(₦' billion)
73.74
179.49
($' million)
3.19
2.00
Micro Business

1,859

1,602

2,061

1,839
(₦' billion)
2.50
2.07
(₦' billion)
24.88
38.21
Small Business

($' million)
0.00
11.00
FINANCIAL STABILITY REPORT – JUNE 2023

Total

(₦' billion)
1,025.61
833.49
($' million)
49.19
614.84
(₦' billion)
829.15
445.65

Furthermore, 14,799 of the financing statements registered in the review period were in
respect of 15,171 women and women-owned enterprises, representing 47.81 per cent of
the total number of borrowers.

Table 2.25: Women and Women-owned Enterprises Transactions on the National Collateral Registry
Debtor Type
Number of Financing Statements
Number of Women and
Women-owned Enterprises
Currency
Value of Financing Statements
(N‘billion)

End-Dec 2022
End-Jun 2023
End-Dec 2022
End-Jun 2023

End-Dec 2022
End-Jun 2023
Individual

NGN
763.21
73.39
Large Business

NGN
1.19
0.59
USD
0.014
0.00
Medium Business

NGN
2.78
1.92
Small Business

NGN
0.19
0.30
Micro
Business

NGN
2.23
1.44
Total

NGN
769.60
77.64
USD
0.01
0.00

A total of 146 financial institutions registered 319,220 financing statements valued ₦17.24
trillion, US$3.09 billion, €11.03 million, and £27,352 from inception in 2016 to end-June
2023.

2.7.2 Financial Inclusion
The Bank sustained its initiatives towards improving financial inclusion, in collaboration with
ODCs and other financial service access points. Bank Verification Number (BVN) enrolment increased to 1,476,805 in the first half of 2023, of which 797,055 were females. Also,
195,314 agents were onboarded under the SANEF agent expansion scheme, bringing the
total number of agents to 1,669,487 and increasing access point per capita to 1,574 agents
per 100,000 adults. Furthermore, the number of active Point-of-Sale (PoS) terminals increased to 1,682,647 at end-June 2023.


Table 2.26: Financial Inclusion Statistics
Indicator
End-Dec 2022
End-Jun 2023
New BVN Registration
1,555,293
1,476,805
New BVN Registration (Female)
996,179
797,055
Total Agents
1,474,173
1,669,487
No. of Onboarded (New) Agents
224,328
195,314
Nos of Agents Per 100,000 Adults
1,391
1,574
Active PoS Terminals
1,029,897
1,682,647

FINANCIAL STABILITY REPORT – JUNE 2023

The significant increase in agent network to 1.67 million from 1.47 million at end-December
2022 enhances efforts towards the attainment of 95 per cent financial inclusion by 2024.

Total National Identity Number (NIN) enrolment increased by 7.45 per cent to 101 million
in the review period, indicating increased opportunity for access to financial services. Also,
there was the launch of the SabiMoni e-Learning Platform to facilitate self-paced online
delivery of the financial literacy curriculum.

Overall, the Bank’s development finance interventions continued to facilitate the flow of
credit to catalyse and transform private sector investments in priority sectors and to generate sustainable jobs, support households’ income and consumption, boost non-oil exports
and sustain economic growth. Also, the Bank’s enhanced loan recovery drive yielded positive outcome, leading to increased repayment.


FINANCIAL STABILITY REPORT – JUNE 2023

Box 1: Impact of the Bank’s Development Finance Interventions

The Bank’s development finance interventions helped in addressing unemployment among the
population and improved the productive capacity of the agricultural sector. They have also contributed in improving electricity generation, transmission and distribution while addressing the
non-performing loans portfolios of banks. The interventions helped the country conserve its
foreign reserves by reducing imports.
An estimated 13 million direct and indirect jobs have been created across the agriculture value
chain. The Agricultural Credit Guarantee Scheme (ACGS) incentivized banks to lend to the
agricultural sector. The risk mitigation strategy has helped to moderate the non-performing
loans of banks by providing a safety net for the lenders and encouraging them to extend credit
to the sector. Also, the Commodity Development Initiatives (CDI) of the Bank helped to scale
up production and output, as virtually every component of the value chain was addressed. In
2022, the combined production of key cereals like maize, rice, and wheat was 19.23 million
metric tonnes (MMT) of which 10.14 per cent was contributed by ABP.
The Bank’s intervention in the power sector through the Nigeria Electricity Market Stabilisation
Facility (phases 1, 2, and 3) improved liquidity as legacy debts in the sector reduced significantly. The revenue accrued to the Nigeria Bulk Electricity Trading Company (NBET) and Market Operators (MO) increased significantly over the years. Also, 414,000 meters were purchased and installed, with 2,226km of 11KV lines, and 130km of 0.45KV lines rehabilitated.
The Bank’s interventions in the power sector supported the procurement of 70,435 units of 500
KVA transformers and the construction of 34 new distribution substations.
The Bank supported households’ income and consumption, especially during the gloomy days
of the COVID-19 lockdown, through its Targeted Credit Facility (TCF) and Agribusiness/Small
and Medium Enterprises Investment Scheme (AgSMEIS). The TCF supported 830,831 beneficiaries consisting of 684,441 households and 146,390 SMEs and positively affected 21.13 million lives in the process, while AgSMEIS supported 40,884 beneficiaries comprising of 14,721
females, and 26,163 males, preserving/creating 126,936 direct and indirect jobs.
Also, the Bank’s enhanced loan recovery drive yielded positive outcomes, leading to significant
increase in repayments.

FINANCIAL STABILITY REPORT – JUNE 2023

REGULATORY AND SUPERVISORY ACTIVITIES
3.1 Financial Soundness Indicators
The Financial Soundness Indicators (FSIs) covers banks’ capital adequacy, asset quality,
liquidity, earnings & profitability, and market risk based on the International Monetary Fund
(IMF) 2019 Financial Soundness Indicators Compilation Guide.
Total assets grew owing largely to the revaluation of foreign currency-denominated risk
assets, while contributing largely to the decline in capital adequacy ratio. However, asset
quality continued to improve as non-performing loans ratio declined.

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
(NPLs) ratio decreased marginally to 4.14 per cent from 4.21 per cent at end-June 2023,
and remained below the 5.00 per cent benchmark. The improvement was due, mainly to
enhanced credit risk management practices coupled with the continued implementation of
the Global Standing Instruction (GSI) policy.
Figure 3.1 Banking Industry NPLs Ratio


The capacity of banks to withstand losses on NPLs not fully provisioned declined, as the
ratio of non-performing loans net of provisions to capital increased to 2.57 per cent at endJune 2023, from 1.59 per cent at end-December 2022. The increase was attributed to the
effect of policy changes governing the operations of the foreign exchange market, which
resulted in a revaluation of FX denominated risk assets. This led to a significant growth in
total risk weighted assets (TRWA) when compared with the change in total qualifying capital.

end-Jun-2021
end-Dec-2021
end-Jun-2022
end-Dec-2022
end-Jun-2023
Percentages
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 3.2 Non-Performing loans net of provisions to capital


3.1.1.2 Core Liquid Assets to Total Assets and Short-term Liabilities
The ratio of core liquid assets to total assets decreased by 2.97 percentage points to 16.85
per cent during the review period, owing to the significant increase in total assets of the
banking sector, relative to the marginal increase in their core liquid assets. Similarly, the
ratio of core liquid assets to short-term liabilities declined by 1.92 percentage points to
26.75 per cent at end-June 2023, which was due largely to significant increases in deposit
liabilities.
Growth in liquid assets was mainly due to increase in banks’ required reserves and treasury
bills holdings, while the rise in deposit liabilities resulted from the revaluation of domiciliary
account balances, following the operational reforms in the FX market. Other factors that
contributed to the growth in total assets of banks included increased investments in corporate and other bonds, unquoted companies, other tangible assets, and property, plants &
equipment.
Figure 3.3 Banking Industry Liquidity Indicators (%)


end-Jun-

end-Dec-

end-Jun-

end-Dec-

end-Jun-

NPLs

Specific Provisions

NPLs net provisions to capital

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

end-Jun-2021
end-Dec-2021
end-Jun-2022
end-Dec-2022
end-Jun-2023
Pecentage(%)
Liquid assets (core) to total assets
Liquid assets (core) to short-term liabilities
FINANCIAL STABILITY REPORT – JUNE 2023

3.1.1.3 Exposure to Real Estate Sector
The banks’ exposure to the real estate sector (residential and commercial) declined marginally in the review period. The ratio of residential real estate loans to total gross loans
decreased by 0.04 percentage point to 0.11 per cent, from 0.15 per cent at end-December
2022. Also, the ratio of commercial real estate loans to total gross loans declined by 0.16
percentage point to 1.96 per cent, compared with 2.12 per cent at end-December 2022.

Figure 3.4 Exposure to Real Estate Sector


3.1.1.4 Exposures to Oil & Gas, Manufacturing and Services Sectors
Banks’ exposure to the Oil & Gas sector increased, while exposures to Manufacturing and
Services sectors declined. The ratio of Oil & Gas loans to gross loans increased by 2.76
percentage points to 18.59 per cent1. The increase was attributed to the rise in the cost of
Oil & Gas sector importations and revaluation of foreign currency denominated loans. However, Manufacturing sector loans to gross loans decreased by 0.27 percentage point to
18.46 per cent. Similarly, the ratio of the Services sector loans to gross loans fell by 0.09
percentage point to 37.04 per cent. The decline in banks’ exposure to the Manufacturing
and Services sectors was attributed largely attributed to the relatively lower component of
foreign currency denominated loans to the sector, and the consequent negligible impact of
revaluation following the operational changes in the foreign currency market.


1 The Oil and Gas exposures here refer solely to exposures under the “Industry” sector using the ISIC classification. This
excludes Oil and Gas exposures under the “Services” sector which represents 7.10 per cent of the total gross loans.

end-Jun-2021
end-Dec-2021
end-Jun-2022
end-Dec-2022
end-Jun-2023
Percentage (%)
Residential real estate loans to total gross loans
Commercial real estate loans to total gross loans
Total Real Estate Loans to Gross Loans
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 3.5: Exposures to Oil & Gas, Manufacturing and Services Sectors


3.1.2 Capital-Based Indicators
The banking industry’s solvency, measured by regulatory capital to risk-weighted assets,
declined to 11.23 per cent, from 13.76 per cent at end-December 2022, owing largely to
growth in risk assets following the revaluation of foreign currency-denominated risk assets.
However, it remained above the regulatory minimum. The regulatory tier-1 capital to riskweighted assets also decreased to 9.60 per cent, from 11.93 per cent in the preceding
period.
Figure 3.6 Banking Industry Capital Adequacy Ratio

*The ratios are computed based on IMF-FSI Manual


end-Jun-2021
end-Dec-2021
end-Jun-2022
end-Dec-2022
end-Jun-2023
Percentage (%)
Oil & Gas to Gross Loans
Manufacturing to Gross Loans
Services to Gross Loans

end-Jun-2021
end-Dec-2021
end-Jun-2022
end-Dec-2022
end-Jun-2023
Percentage(%)
Regulatory capital to risk-weighted assets
Regulatory Tier 1 capital to risk-weighted assets
FINANCIAL STABILITY REPORT – JUNE 2023

3.1.3 Income and Expense Ratios
Compared to the preceding period, the ratio of interest margin to gross income decreased
by 2.43 percentage points to 56.54 per cent. The ratio of non-interest expenses to gross
income also declined by 1.5 percentage points to 67.81 per cent. Furthermore, the ratio of
personnel expenses to non-interest expenses dropped to 24.63 per cent.
3.1.4 Non-Interest Banks
The total assets of non-Interest banks (NIBs) grew by 36.96 per cent to ₦978.68 billion,
from ₦714.59 billion at end-December 2022. Similarly, total deposits and total credits grew
by 41.90 per cent and 27. 96 per cent to ₦716.04 billion and ₦324.45 billion, respectively
at end-June 2023.
The total assets, deposits and credits of the NIBs relative to the total banking industry at
end-June 2023 stood at 1.02 per cent, 1.24 per cent and 0.86 per cent, respectively, compared with 0.97 per cent, 1.11 per cent and 0.85 per cent at end-December 2022.

3.2 The Banking Industry Stress Tests
The Bank continued to assess the soundness and stability of the financial system through
top-down solvency and liquidity stress testing to identify and analyse Commercial, Merchant and Non-Interest Banks (CMNBs) vulnerabilities and risks, with a view to implementing appropriate regulatory measures.
Globally, most monetary authorities adopted contractionary monetary policy stance in the
first half of 2023 to rein in inflation, resulting in tight financial markets. In Nigeria, the Monetary Policy Committee (MPC) raised MPR three times in the first half of 2023 from 16.50
in December 2022 to 17.50, 18.00 and 18.50 per cent in January, March and May 2023,
respectively, to rein in inflation and stabilize the exchange rate.
The rise in interest rates impacts the value of banks’ holdings of fixed income securities
and could constitute a significant risk to banks’ solvency and liquidity. At end-June 2023,
fixed income securities holdings of banks stood at N4,712.87 billion, representing 101.41
per cent and 12.47 per cent of the banking industry total qualifying capital and total credit
exposure, respectively.
Furthermore, following the inauguration of the new government in May 2023, major reforms
were announced, including fuel subsidy removal and changes in the operations of the foreign exchange market. The reforms resulted in over 100. 00 per cent overnight increase in
the pump price of fuel and over 60.00 per cent depreciation of the Naira against the dollar,
thereby increasing inflationary pressures.
The June 2023 stress tests assessed the respective impacts of these reforms, the interest
rate hikes, and other exogenous factors on the solvency and liquidity positions of the banking industry by end December 2023.

FINANCIAL STABILITY REPORT – JUNE 2023

3.2.1 Solvency Stress Test
3.2.1.1 Baseline Position
The baseline CAR, LR and NPL ratios in the period under review were 11.23, 48.38 and
4.14 per cent, respectively; while Return on Assets (ROA) and Return on Equity (ROE)
stood at 2.3 and 32.2 per cent, respectively.

Table 3.1: Banking Industry Baseline Indicators

CAR (%)
LR (%)
NPLs (%)
ROA (%)
ROE (%)
a. Jun 2022

b. Dec 2022

c. Jun 2023

Percentage Points Change (c – b)


Figure 3.7 Banking Industry CAR


3.2.1.2 General Credit Default Stress Test
The stress test results show that the banking industry could withstand shocks of up to 30.00
per cent increase in the industry’s NPLs, as CAR would remain above the regulatory requirement of 10.00 per cent. Increase in NPL of 15.00, 20.00, 30.00 and 50.00 per cent
would result in CAR declining to 10.76, 10.61, 10.29 and 9.66 per cent, respectively, from
the baseline of 11.23 per cent.

Table 3.2 General Credit Default Stress Test


Dec '18
Jun '19
Dec '19
Jun '20
Dec '20
Jun '21
Dec '21
Jun '22
Dec '22
Jun '23
Per cent
Shocks
December 2022
CAR (%)
June 2023
CAR (%)
Baseline
13.76
11.23
10% increase in NPLs
13.44
10.92
15% increase in NPLs
13.28
10.76
20% increase in NPLs
13.12
10.61
30% increase in NPLs
12.81
10.29
50% increase in NPLs
12.16
9.66
FINANCIAL STABILITY REPORT – JUNE 2023

3.2.1.3 Credit Concentration Stress Test
A breakdown of the CMNB’s total credit by sector at end-June 2023 is depicted below, and
it shows that the Oil and Gas sector has the highest proportion of industry credit with 25.78
per cent of total industry credit exposure.
Figure 3.8 Credit Exposure by Sectors


The stress tests of sectoral credit concentration shocks showed that a shock of “20.00 per
cent of the Oil & Gas exposures classified as doubtful” could reduce CAR to 10.38 per cent,
while a shock of “20.00 per cent classified as loss” could decrease CAR to 5.66 per cent.
Similarly, a test of obligor credit concentration shocks of the five largest corporate credit
facilities shifting from “performing loans to sub-standard” (scenario 1), and “sub-standard
to doubtful” (scenario 2) would result in banking industry CAR declining to 10.68 and 9.86
per cent, respectively.
These results show the relative resilience of the banking industry to risks arising solely from
sectoral or obligor credit concentrations.

Table 3.3 Obligor Credit Concentration Stress Test

Oil and Gas
25.78%
Manufacturing
18.38%
Government
6.43%
General
8.32%
Gen Comm
7.99%
Finance and
Insurance
7.61%
Others
25.49%
Scenarios
Dec 2022
CAR (%)
June 2023
CAR (%)
Baseline
13.76
11.23
Scenario 1
Five largest corporate credit facilities shifted from performing loans to
sub-standard (10% provision)
13.43
10.68
Scenario 2
Five largest corporate credit facilities shifted from sub-standard to
doubtful (50% provision)
12.09
9.86
FINANCIAL STABILITY REPORT – JUNE 2023

3.2.1.4 Interest Rate Stress Test
Despite the contractionary monetary policy stance, the banking industry’s liquidity ratio remained robust at 48.38 per cent, significantly above the 30.00 per cent regulatory minimum.
Analysis of the impact of interest rate rise on long tenored fixed income securities based
on IFRS 9 standards, showed that banks could withstand unrealised losses of up to 25.00
per cent fall in the value of fixed income securities classified as FVTPL and FVTOCI2. The
industry CAR would decline to 9.67 per cent from 11.23 per cent.
Further analysis based on a scenario of 25 per cent fall in value of the entire fixed income
securities holdings showed that industry CAR would decline to 8.38 per cent.
In all of the above scenarios, LR remained robust at above 44.00 per cent, significantly
more than the regulatory minimum of 30.00 per cent.

Figure 3.9 Interest Rate Stress Test


2 After initial recognition, all financial assets such as fixed income securities are measured at, and thus classified as (a)
Amortised cost for assets held to maturity (HTM) (b) Fair Value through Profit and Loss (FVTPL) (c) Fair Value through
Other Comprehensive Income (FVTOCI).


Scneario 1: 10%
Fall in Value
Scneario 2: 15%
Fall in Value
Scneario 3: 25%
Fall in Value
Scneario 4: 50%
Fall in Value
Impact of Fall in Value of Fixed Income
Securities (FVTPL & FVTOCI) on CAR

Baseline
Position
Scneario 1:
5% Fall in
Value
Scneario 1:
10% Fall in
Value
Scneario 2:
15% Fall in
Value
Scneario 3:
25% Fall in
Value
Scneario 4:
35% Fall in
Value
Impact Impact of Fall in Value of Fixed Income
Securities (FVTPL, FVTOCI & HTM) on CAR

Baseline
Position
Scneario 1:
10% Fall in
Value
Scneario 2:
15% Fall in
Value
Scneario 3:
25% Fall in
Value
Impact of Fall in Value of Fixed Income
Securities (FVTPL & FVTOCI) on LR

Baseline
Position
Scneario
1: 5% Fall
in Value
Scneario
1: 10%
Fall in
Value
Scneario
2: 15%
Fall in
Value
Scneario
3: 25%
Fall in
Value
Scneario
4: 35%
Fall in
Value
Impact of Fall in Value of Fixed Income
Securities (FVTPL, FVTOCI & HTM) on LR
FINANCIAL STABILITY REPORT – JUNE 2023

3.2.1.5 Scenarios Stress Test
A severe scenario stress test was conducted to determine the potential impact of the foreign
exchange reforms, removal of fuel subsidy and the tightened financial markets arising from
interest rate hikes on banks CAR and LR by end December 2023. See Box 2 below for
stress test scenario and key assumptions.
The results showed that CAR and LR will moderate to 7.24 and 44.45 per cent, from 11.23
and 48.38 per cent, respectively. The results highlight the robust liquidity position and relative resilience of the industry to the current headwinds impacting the industry. The Bank
will continue to monitor developments closely with greater attention paid to the most vulnerable institutions.

Box 2: Stress Test Scenarios and Assumptions
Scenarios
a) Removal of fuel subsidy resulting in increase in general credit risk with 7.5% of total credit
reclassified as sub-standard from performing.
b) Reforms in the foreign exchange market with the free float of the Naira resulting in 100%
depreciation against the US dollar leading to:
i.
5% of foreign currency denominated loans reclassified as doubtful from performing.
ii.
Translation gains/losses based on net foreign assets holdings.
iii.
Increase in banks’ Euro bonds services costs.
c) Tight financial markets owing to monetary policy rate hikes leading to 25% fall in value of
fixed income securities.
Assumptions
a) These developments apply to the banking industry symmetrically.
b) There are no regulatory interventions, and no management action by the banks.
c) Capitalization under stress (CAR(t+1)) is only mitigated by net income as follows:
CAR(t+1) =
Capitalization(t) + Net Income(t+1)
RWA(t+1)


3.2.1.6 Climate Risk Stress Testing
The increasing threat posed by climate change to financial system stability necessitated
the conduct of stress test to determine the resilience of the Nigerian banking system. Climate risk generally crystalizes as physical and transition risks. While physical risks involve
floods, droughts, wildfire outbreaks, etc., transition risks pertain to changes in business
methods toward environmentally friendly technologies and production as well as paced reduction in carbon emission, among others.
Climate risk stress test was conducted under a mild, moderate and severe scenarios as
depicted in Box 3 below. The results of the stress test showed that the banking industry
solvency was resilient under the mild scenario as the industry CAR remained above the
FINANCIAL STABILITY REPORT – JUNE 2023

regulatory threshold at 10.40. However, under the moderate and severe scenarios, the
CAR fell below the 10.00 per cent threshold to 8.04 and 4.12 per cent, respectively.
The results highlight the potential impact of climate risks on the banking industry and the
need to take proactive mitigating measures.
Figure 3.10 Climate Risk Stress Test: Impact on CAR


Box 3: Climate Risk Stress Test Scenario Assumptions
Scenarios
Mild
Moderate
Severe
Physical risk factors –
Losses in credit exposures due to floods affecting businesses in
flood prone areas.
i) 1% Loss in Total
Credit Exposure
ii) 10% Loss in Agric
Credit Exposure
i) 2.5% Loss in total
credit exposures
ii) 25% Loss in Agric
credit exposures
i) 5% Loss in total credit
exposures
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
Subs-sector
ii) 5% Loss in Exposure
to Power & Energy
Sub-sector
i)
10% Loss in exposures to the Downstream Subs-sector
ii) 10% Loss in exposures to the Power &
Energy Sub-sector
i) 15% Loss in exposures
to the Downstream
Subs-sector
ii) 15% Loss in exposures
to the Power & Energy
Sub-sector

3.2.2 Liquidity Stress Test
The stress test results revealed that after a one-day run scenario, the LR of the CMNBs
could decline to 36.06 per cent from the 48.78 per cent baseline position. Similarly, under
the 5- and 30-day run scenarios, the LR could decline to 15.80 and 9.40 per cent, implying
liquidity shortfalls of ₦4,198.56 billion and ₦5,584.13 billion, respectively. However, the
Bank had at its disposal significant CRR balances of ₦13,690.00 billion to backstop
CMNBs’ liquidity.


Mild
Moderate
Severe
Per Cent
Baseline CAR
Post-Shock CAR
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 3.11 Liquidity Stress Test


Table 3.4: Implied Cash Flow Liquidity Stress Test Results

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

Dec 2022
Jun 2023
Dec 2022
Shortfall to 30%
LR threshold
(N’ billion)
Jun 2023
Shortfall to 30% LR
threshold
(N’ billion)
Day 1


Day 2


Day 3


Day 4


Day 5


Day 30


3.2.3 Maturity Mismatch
The cumulative assets and liabilities baseline position showed a mismatch of N6,163.70
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 2A) revealed that the CMNBs
were adequately funded, except for the “above 3 years” bucket. Under Static Rollover Risk
Analysis (Test 2B) and Dynamic Rollover risk (Test 2C), there were mismatches of
N11,172.34 billion and N13,345.06 billion, respectively. Relative to the end-December 2022
tests, these reflected increases of ₦3,793.17 billion and ₦3,186.55 billion under the Test
2B and Test 2C, respectively.


Pre -Shock
After Day 1
After Day 2
After Day 3
After Day 4
After Day 5
After cum day

Per cent
Dec-21
Jun-22
Dec-22
Jun-23
FINANCIAL STABILITY REPORT – JUNE 2023

Table 3.5: Maturity Profile of Assets and Liabilities at End-June 2023
Bucket
Liabilities
Assets
Mismatch
Cumulative Mismatch
₦’ billion
≤30 days

31-90 days

91-180 days

181-365 days

1-3 years

>3 years

Total
65,815.69
71,979.39


Table 3.6: Stress Test Results for Maturity Mismatch at End-June 2023

Test 2A
Descriptive Maturity Mismatch.
(No consideration of rollover)
Test 2B
Static Rollover risk Analysis.
(No possibility to close liquidity gaps in other buckets)
Test 2C
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
27,601.65

17,657.02

688.32

31-90 days
7,706.92

(1,701.67)

(1,290.11)

91-180days
6,009.96

(2,525.48)

(1,307.00)

181-365days
2,919.59

(5,878.09)

(1,132.31)

1-3 Years
3,756.61

(5,308.97)

(1,828.53)

Above 3 years
(5,219.96)

(13,415.16)

(8,475.43)

Total
42,774.77

(11,127.34)
(13,345.06)

3.2.4 Contagion Risk Analysis
The contagion risk via interbank placements and takings increased as total exposure from
inter-bank placements and takings increased by 134.71 per cent to ₦1,228.92 billion, compared to the exposure at end-December 2022. Further analysis revealed that 12 out of 23
banks accounted for ₦1,108.94 billion of total placements, while six banks accounted for
₦874.43 billion of total takings. However, the exposures did not pose any significant threat
to financial system stability, as all placements were collateralised.

FINANCIAL STABILITY REPORT – JUNE 2023

Figure 3.12 Network Analysis based on Interbank Exposures


BOX 4: 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 total 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 total 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;

Node colour representation
Blue = Placement only

Purple = Net Placement

Pink = Takings only

Magenta = Net Takings
FINANCIAL STABILITY REPORT – JUNE 2023

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 3.7 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

7.
CRR

3.3 Supervision of Banks
The Bank sustained its supervisory role over the banking industry towards promoting a
safe, stable, and sound financial system through issuance of relevant guidelines, offsite
surveillance, onsite examinations, and special investigations.
3.3.1 Risk Assets Examination
The joint CBN/NDIC Risk Assets Examinations (RAE) of all CMNBs were carried out in
February 2023 to assess their asset quality, adequacy of credit loss and other known loss
provisions, liquidity/funds management, and the implementation of IFRS 9. It also included
reviews of income and expenditure and the Internal Capital Adequacy Assessment Process
(ICAAP). The recommendations from the exercise were communicated to the banks and
implementation was being monitored.
3.3.2 Foreign Exchange Examination
The review of foreign exchange (FX) activities of 29 CMBs was undertaken to ascertain
compliance with extant laws and regulations. The review covered FX operations for the
period of April 1, 2022 to March 31, 2023. The reports of the FX examinations were being
finalised.


FINANCIAL STABILITY REPORT – JUNE 2023

3.3.3 Supervision of Domestic Systemically Important Banks
In accordance with the Framework for the Regulation and Supervision of Domestic Systemically Important Banks (D-SIBs), the biannual assessment of banks was carried out in
June 2023. The result of the assessment showed no change in the number of D-SIBs as
the same five commercial banks maintained their designation in the period under review.
The D-SIBs were largely compliant with the Bank’s prudential requirements.
The five D-SIBs accounted for 58.98 per cent (₦56,851.81 billion) of CMNBs assets, 60.94
per cent (₦35,313.41 billion) of CMNBs deposits, and 56.40 per cent (₦21,320.26 billion)
of CMNBs credit. These changes reflected increases of 29 per cent (₦12,782 billion) in
assets, 29.54 per cent (₦8,052.72 billion) in deposits, and 26.98 per cent (₦4,530 billion)
in credit respectively, compared to the end-December 2022 position.
Given the significant impact of their activities on the financial system, the D-SIBs will continue to be subjected to enhanced supervision.

3.3.4 Asset Management Corporation of Nigeria
The Bank conducted a routine examination of the Asset Management Corporation of
Nigeria (AMCON) covering the period October 1, 2021, to December 31, 2022. The key
findings are highlighted below.
The Corporation made cash and non-cash recoveries of ₦45.83 billion and ₦15.16 billion in the review period, compared with ₦48.38 billion and ₦20.40 billion, respectively,
in the preceding half year. Cumulatively, total recoveries stood at ₦1,801 billion, comprising ₦971.33 billion in cash and ₦829.73 billion non-cash items.
The carrying value of AMCON’s liabilities rose by 4.75 per cent to ₦5,865 billion, compared with ₦5,599 billion at end-December 2022. The increase was due to accrued
interest, legal expenses and other debt recovery costs. The carrying value of the
AMCON Note remained at ₦3,859 billion and is scheduled for redemption on December
27, 2023. The ₦500 billion loan and the accrued interest of ₦15 billion were fully repaid
by AMCON on January 31, 2023.
The Corporation’s total assets net of impairment increased by 18.25 per cent to
₦1,170.51billion, above the ₦989.89 billion recorded at end-December 2022. The
growth resulted from an increase in cash & bank balances and financial investments.
The banks’ contribution to the Banking Sector Resolution Cost Fund (BSRCF) for the
year 2023, based on the preceding year’s audited financial statements, amounted to
₦416.99 billion.

3.3.5 Supervision of Other Financial Institutions
The Bank conducted special Money Laundering, Financing of Terrorism, and Proliferation
Financing (ML/FT/PF) risk examination of 100 microfinance banks and 810 Bureaux De
Change (BDCs). The Bank also participated in the national residual risk assessment of the
FINANCIAL STABILITY REPORT – JUNE 2023

OFIs. The ML/FT/PF risk examination revealed various infractions of extant regulations and
the erring institutions were penalised accordingly.

3.3.6 Cross Border Supervision of Nigerian Banks
The number of offshore entities of Nigerian banks remained 64, comprising 55 bank subsidiaries, four representative offices, one affiliate, three international branches and one
agent banking arrangement.
The Bank conducted risk-based supervision (RBS) and Anti-Money Laundering, Countering Financing of Terrorism and Counter Proliferation Financing (AML/CFT/CPF) examinations of six offshore banking subsidiaries of Nigerian Banks in Kenya, Liberia, South Africa
and United Kingdom. The examinations also addressed the supervisory concerns in the
operations of the offshore subsidiaries and validated returns submitted by the parent banks.
The examinations noted concentration in both funding sources and credit portfolios across
the subsidiaries. Consequently, supervisory letters were issued to the erring institutions to
address the noted concerns within stipulated timelines.
3.3.7 Regulation of Representative Offices of Foreign Banks in Nigeria
The Bank issued the Guidelines for the Regulation of Representative Offices of Foreign
Banks in Nigeria on May 3, 2023. The objective of the Guidelines is to facilitate the understanding of regulatory requirements for operations of representative offices of foreign banks
in Nigeria and foster a more regulated and stable environment for foreign bank operations.

3.4 Supervisory Collaboration
During the review period, the Bank participated in various regional and international engagements on cyber-security, cross border supervision and other emerging issues.

3.4.1 Community of African Banking Supervisors
The Working Group on Crisis Management, Banking Resolution and Fintech, chaired by
the CBN, finalised the Community of African Banking Supervisors (CABS) Framework on
Crisis Management and Bank Resolution as well as the CABS Fintech Regulatory and Supervisory Framework and forwarded them to the Association of African Central Banks
(AACB) Secretariat for approval. Furthermore, the Bank hosted a meeting of the Working
Group to review the workplan for 2023.
i.

The Bank also participated in the conference of the CABS held at Banjul, The Gambia, with
44 member-countries in attendance. The meeting reviewed reports from working groups
and discussed other topical issues of concern to member countries, including
AML/CFT/CPF, information exchange and key lessons from the collapse of the Silicon Valley Bank in the United States.
FINANCIAL STABILITY REPORT – JUNE 2023

3.4.2 College of Supervisors of the West African Monetary Zone
The Bank participated in the 44th and 45th meetings of the College of Supervisors of the
West African Monetary Zone (CSWAMZ), in The Gambia and Ghana, which reviewed developments in the banking system across the zone in the last quarter of 2022 and the first
quarter of 2023, respectively. Cross-border supervision issues, joint examination exercises,
Basel II/III capital requirements and IFRS 9 & 16 as well as other relevant financial stability
concerns of the sub-region, were discussed.

3.4.3 Technical Support to Other Central Banks
The Bank continued its technical support to other central banks. In this connection, it
hosted a delegation from the Bank of Tanzania on a study tour focused on Basel II implementation and Non-Interest banking in Nigeria. Also, it conducted a workshop for members of the CSWAMZ on Climate-Related Financial Risks in Banks.

3.5 Credit Risk Management System
The Credit Risk Management System (CRMS) database remained a reliable source of
credit information and an additional risk management tool for the banking industry.
The number of credit facilities on the CRMS database increased by 13.25 per cent to
49,060,977, compared with the level at end-December 2022. Similarly, the number of facilities with outstanding balances increased by 33.05 per cent to 12,744,856 at end-June
2023.

Table 3.8: Credit Risk Management System
Borrowers from the Banking Sector (Commercial, Merchant and Non-Interest Banks)
Description

End-Dec 2022

End-Jun 2023

Change
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 Credit Bureaux
The licensed credit bureaux remained three and the average number of uniquely identified
credit records decreased by 26.70 per cent to 56.87 million. The development reflected
lower patronage for credit which could largely be attributed to the high interest rate regime
FINANCIAL STABILITY REPORT – JUNE 2023

and the cautious attitude of customers towards borrowing due to election-related uncertainties. However, the average number of subscribers increased to 1,365 at end-June 2023.

Table 3.9: Credit Bureaux Statistics
S/N
Description
CRC Credit
Bureau Ltd
CR Services
Credit Bureau Plc
First Central
Credit Bureau Ltd

Number of credit records
88,864,944
96,668,433
80,816,616

Value of Credit Facilities (N’Tn)
50.35
64.6
40.76

Number of borrowers
34,937,835
17,989,074
23,389,390

Number of subscribers
1,793

1,564

3.7 Other Developments in the Financial System
3.7.1 Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing
In continuation of its efforts to safeguard the banking system from ML/FT/PF, the Bank
issued several guidelines, conducted capacity building activity, and collaborated with other
stakeholders to implement the Mutual Evaluation Report (MER) Recommendations.
The Bank issued the following guidelines and regulations:
i.
The CBN Customer Due Diligence Regulations, 2023 to provide additional
customer due diligence measures for financial institutions.
ii.
A circular to financial institutions to reflect changes to the United Nations Security Council ISIL (Da’esh) and Al-Qaida Sanctions List of Individuals and
Entities.
iii.
Guidance Notes on Politically Exposed Persons (PEPs) 2023.
Trainings on AML/CFT measures were conducted for 262 Bank Examiners and 256 officers
of banks and payment service providers. Feedback sessions were also held with 34 Chief
Compliance Officers (CCOs) of banks on regulatory expectations and to promote proactive
approaches to AML/CFT compliance.
Furthermore, the Bank continued to collaborate, cooperate and share information with other
domestic stakeholders in its quest to ensure full implementation of the MER recommended
actions (RAs) as follows:
i.
Participated in the conduct of AML/CFT residual risk assessment to update the 2022
National Inherent Risk Assessment (NIRA) Report.
ii.
Attended the two meetings of the Inter-ministerial Committee (IMC) where progress
made on implementation of the MER RAs by stakeholders and sub-committees
were discussed, and additional deliverables assigned accordingly.
iii. Participated in the GIABA Plenary where mutual evaluation and follow up reports of
some member countries in the West African Sub-region were discussed and approved.
iv. Participated in the Heads of Agencies meeting in London to assess progress made
on the implementation of the MER RAs road map.
FINANCIAL STABILITY REPORT – JUNE 2023

3.7.2 Financial Services Regulation Coordinating Committee
The Financial Services Regulation Coordinating Committee (FSRCC) held its 74th meeting
during the review period. The Committee discussed the impact of high inflation, interest
rates, regional fragmentation, lingering spillover effects of the Covid-19 Pandemic and the
ongoing Russia-Ukraine crisis on Nigeria’s financial system.
The Committee agreed on the need for enhanced alignment of fiscal and monetary policies
to deliver price and financial stability and the implementation of the Pan-African Payment
and Settlement System (PAPSS) to improve cross-border payments. Others included: the
reporting and prompt treatment of cybersecurity and IT risks within member agencies, and
the stress testing of all FIs by their respective regulatory agencies to ensure their safety
and soundness.
Furthermore, the Committee agreed on steps to enhance collaboration to counter the increasing threat of Illegal Fund Operators (IFOs) and Ponzi schemes. To this end, the Legal
and Enforcement Sub-Committee of the FSRCC enhanced its public awareness campaign
to curb the activities of IFOs and Ponzi schemes through collaboration with the National
Broadcasting Commission.

3.7.3 Non-Interest Financial Institutions
The Bank granted one non-interest bank licence with national authorisation and approved
the upgrade to a national authorisation for one non-interest bank with regional authorisation. Thus, the number of licensed non-interest banks with national authorisation increased
to four during the review period.
The Financial Regulation Advisory Council of Experts (FRACE) held two statutory meetings
during the review period and approved the following new products:
i) Unrestricted Wakalah Investment Product for Liquidity Management.
ii) Ju’alah-based service product.
iii) Salam product.
iv) Education and Vocation Finance Products.
v) Deposit/Investment and Murabaha Facility products.


3.7.4 eNaira
During the review period, the Bank sustained efforts in enhancing the functionalities and
adoption of the eNaira, including the integration of eNaira with more financial service providers, enabling eNaira payments on their platforms and the issuance of eNaira cards.
Other key developments included deployment of the eNaira Speed App Lite to enhance
user experience through high speed and low-data requirements. The key features of the
new app include bills payment, eNaira swap, eNaira Near Field Communication Tags/cards
or wearables, Merchant Checkout service.

FINANCIAL STABILITY REPORT – JUNE 2023

3.7.4.1 eNaira Statistics and Trends
The number of customers on-boarded on the eNaira platform increased by 1,121.30 per
cent to 27,971,460 from 2,290,300 in the preceding half year. Similarly, the number of active wallets increased by 24.32 per cent to 180,448 from 145,146.
The significant increase in the adoption of the eNaira was largely driven by the enlistment
of more partner agents involved in the on-boarding exercise.

The total eNaira minted increased by 300.00 per cent to ₦20.00 billion, while eNaira in
circulation also increased by 164.31 per cent to ₦6.74 billion, at end-June 2023. Consumers and merchants held ₦5.75 billion of the ₦6.74 billion in circulation, while Financial Institutions held ₦0.99 billion. The huge increase in the minted eNaira and holdings of consumers and merchants reflected the high rate of adoption.
Table 3.10: Minting and Holdings of eNaira

End-Dec -22 (₦’bn)
End-Jun -23 (₦’bn)
Change (%)
eNaira Minted
5.00
20.00
300.00
eNaira in Circulation:
2.55
6.74
164.31
- In FIs' wallets
1.65
0.99
-40.01
- In Consumers / Merchants' wallets
0.90
5.75
539.07
- In Stock with CBN
2.45
13.26
441.16

3.7.5 Nigeria Sustainable Banking Principles
The Bank reviewed the returns of 33 banks to assess the implementation of the Nigeria
Sustainable Banking Principles (NSBPs). In general, the banking industry recorded considerable progress in the implementation of the NSBPs, including the assessment of Environmental and Social (E&S) risks in their business considerations, and adoption of measures
to reduce environmental footprints of their operations, among others.
However, banks that failed to meet the prescribed requirements for the implementation of
the NSBPs were directed to address the observed lapses, including the enhancement of
environmental and social risk management practices, deployment of measures to reduce
the footprints from their operations, E&S assessment of third-party vendors, and building
the capacity of their employees, among others.

3.7.6 Implementation of Basel III
The implementation of Basel III commenced in a parallel run arrangement with Basel II
standard. Following the conclusion of the nine months “Parallel Run” in September 2022,
the Bank updated the relevant Basel III Guidelines and reviewed the Reporting Template
based on feedback from the banks.
The key issues noted included:
• Eligibility criteria for additional tier 1 instrument.
FINANCIAL STABILITY REPORT – JUNE 2023

• Application of Liquidity Coverage Ratio (LCR) rules at solo and consolidated levels.
• Definition of significant currency for LCR segregation.
The take-off date for the full implementation of Basel III standards in Nigeria is still under
consideration.

3.8 Financial Literacy and Consumer Education
3.8.1 Global Money Week
The Bank, in collaboration with the Junior Achievers of Nigeria and Bankers Committee,
commemorated the 2023 Global Money Week with over 600 secondary school students
across the 6 geo-political zones mentored on the importance of savings, budgeting and
investing, among others.

3.8.2 Launch of Financial Literacy E-Learning Platform (SabiMONI)
The Bank launched the SabiMONI financial literacy e-Learning platform in the review period. The platform provides access to general financial education and certification for Financial Literacy Trainers (CFLT) through self-paced learning programme.
A total of 2,368 users had been onboarded at end-June 2023, since the launch of the platform on May 15, 2023.

3.9 Market Conduct and Development
3.9.1 Validation of Compliance Claims and Conduct of Mystery Shopping Exercise
The Bank conducted a validation exercise on four banks to assess their level of their compliance with recommendations of its 2022 Consumer Protection Compliance Examination.
The focus of the exercise included legibility of contractual documents, overdrawing of accounts with non-credit related fees and charges, as well as transaction narration in account
statements. It also conducted a mystery shopping exercise on 17 commercial banks to
determine their level of compliance with selected provisions of its Consumer Protection
Regulations. Appropriate regulatory actions were taken against erring banks.

3.10 Complaints Management and Resolution
A total of 4,111 complaints were received against financial institutions regulated by the
Bank, reflecting an increase of 50.15 per cent from 2,738 received in the second half of
2022. Of the complaints received, 91.41 per cent were against banks, 8.05 per cent against
Other Financial Institutions (OFIs), while 0.54 per cent were miscellaneous complaints.
Complaints on failed transactions accounted for 45.22 per cent, followed by fraud representing 17.85 per cent and account management with 17.42 per cent, while others accounted for 19.51 per cent.

A total of 3,648 complaints were resolved or closed, indicating an increase of 950 (35.21
per cent) over the 2,698 resolved or closed in the second half of 2022. The complaints
resolved or closed in the first half of the year included 848 outstanding complaints brought
FINANCIAL STABILITY REPORT – JUNE 2023

forward from the second half of 2022. A total of 1,311 complaints were outstanding at endJune 2023.

Figure 3.13 Number of Complaints Received

Figure 3.14 Complaints Resolved or Closed

End-Dec 2022
End-Jun 2023

End-Dec 2022
End-Jun 2023
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 3.15 Complaints Resolved or Closed


Figure 3.16 Distribution of Complaints Resolved or Closed


Total claims in local and foreign currencies amounted to ₦31.27 billion and US$24,992.05
respectively, as against ₦1.87 billion and US$105,830.49 respectively, in the preceding
period, indicating an increase of 1,569.82 per cent in local currency claims and a decrease
of 76.38 per cent in foreign currency claims. The sum of ₦15.63 billion and US$25,246.52
were refunded in the first half of 2023, compared with ₦1.49 billion and $18,691.50 in the
second half of 2022, reflecting increase of 946.84 per cent and 25.07 per cent in local and
foreign currency refunds. The large increases in the value of claims and refunds during the
review period reflected the increased number of complaints arising from the implementation
of the Naira redesign and cashless policies. The Bank continued to improve the effectiveness of its consumer complaints resolution mechanism.

ELECTRONIC/CARDS
54%
FRAUD 21%
ACCOUNT MGT
20%
EXCESS CHARGES
3%
OTHERS 2%
ELECTRONIC/CARDS
FRAUD
ACCOUNT MGT
EXCESS CHARGES
OTHERS

JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
NO. OF CASES RESOLVED
NO. OF CASES CLOSED
TOTAL
FINANCIAL STABILITY REPORT – JUNE 2023

3.10.1 Capacity Building Programme
As part of the capacity building efforts, 207 staff of MFBs were certified by the Chartered
Institute of Bankers of Nigeria (CIBN) on completion of the Microfinance Certification Programme during the review period. Consequently, the total number of certified staff increased to 8,596, from 8,389 at end-December 2022.
The Bank also organized specialized training for examiners on AML/CFT/CPF, with focus
on risk-based supervision, beneficial ownership, suspicious transaction reporting, targeted
financial sanctions, and PEPs.

3.10.1.1
IFRS 9 – Financial Instruments
The Bank hosted the IMF Afritac II – technical assistance mission during the review period.
The mission focused on IFRS 9 and Prudential Provisioning towards building examiners’
capacity on Expected Credit Loss (ECL) model validation and evaluation.

3.10.1.2
Annual Symposium of Nigeria Microfinance Platform
The Nigeria Microfinance Platform (NMP) held its 8th Annual Symposium with the theme
“Sustainable Finance: The Next Big Thing for Microfinance Institutions” during the review
period. The symposium broadened the knowledge of member institutions on their roles,
processes, and benefits of sustainable financing options to reposition the sector to embrace
globally accepted and environmentally friendly operational standards.


FINANCIAL STABILITY REPORT – JUNE 2023

DEVELOPMENTS IN THE PAYMENTS SYSTEM
Several policies and initiatives were implemented with the key objective of improving the
safety and efficiency of the Nigerian payments system.
Stakeholders in Nigeran payments system continued to implement several policies and initiatives aimed at maintaining a high level of safety and efficiency in the system. Developments in the ecosystem included the issuance of regulatory guidelines for contactless payments, commencement of the first cohort of the Regulatory Sandbox and the initiation of
the Open Bank Registry. The Bank maintained its regulatory oversight on the payments
system.
4.1 Bank Verification Number
Bank Verification Number (BVN) enrolment increased by 2.61 per cent to 57,990,304 from
56,513,499 at end-December 2022. Of the 182,013,156 active customer accounts, 84.64
per cent were linked with BVNs, while 8,096 were on the watch-list at end-June 2023.
Table 4.1 BVN Statistics

End-December 2022

End-June 2023
% Change
BVNs enrolled
56,513,499

57,990,304
2.61
Accounts linked with BVN
127,916,574

154,053,756
20.43
Active Accounts
159,421,664

182,013,156
14.17
Watch-listed BVNs
7,353

8,096
10.10

4.2 Licensing of Payments Service Providers
During the review period, commercial licences were issued to 78 Payments Service Providers (PSPs), consisting of: one Card Scheme, one Switching & Processing Company, 18
Payment Terminal Service Providers (PTSP), 35 Payment Solution Service Providers
(PSSP), and 23 Super-Agents, bringing the total number of licensed PSPs to 207.

Table 4.2 Payments System Participants
Licence Type
Dec-2022
Jun-2023
Card Schemes

Mobile Money Operator

Switching/Processing Companies

Payment Solution Services


Payment Terminal Services Providers

Payment Solution Service Providers

Super-Agents

Total

FINANCIAL STABILITY REPORT – JUNE 2023

4.2.1 Oversight & Compliance Assessment of Payments Service Providers
The Bank conducted a routine examination of 6 licensed PSPs to ascertain their risk management practices and compliance with extant regulations. The examinations revealed
some
gaps
in
information
security
standards,
cyber-security
self-assessment,
AML/CFT/CPF practices, corporate governance practices and fraud monitoring solutions.
Appropriate regulatory measures were taken to address the observed gaps.

4.3 Cheque Standards and Cheque Printers’ Accreditation Scheme
The Bank conducted accreditation and compliance exercises for cheque printers and personalizers in line with extant regulations. Consequently, three cheque printers’ licences due
for renewal were renewed, while two other cheque printers with valid licences were sustained. Similarly, the seven commercial bank licences to personalize cheques were sustained.


4.4 Trends in the Payments System
4.4.1 Large Value Payments
The volume and value of inter-bank fund transfers through the Real Time Gross Settlement
(RTGS) System increased by 4.32 per cent and 39.54 per cent to 145,190 and ₦51,341.43
billion, compared with 139,179 and ₦36,792.58 billion, respectively, at end-December
20223. The increases reflected largely users’ enhanced confidence in the payments system
and the use of RTGS for large value payments.

4.4.2 Retail Payments
4.4.2.1 Cheque Clearing
The volume and value of cheques cleared were 2,166,348 and ₦1,616.23 billion at endJune 2023, compared with 1,995,934 and ₦1,611.61 billion, in the preceding half. These
indicated increases of 8.54 and 0.29 per cent in volume and value, respectively.

4.4.2.2 Electronic Transactions
The volume and value of electronic transactions increased by 102.43 per cent and 5.06 per
cent to 24,661,450,659 and ₦974,681.74 billion, respectively, during the review period. The
surge in the usage of electronic payments was due to the increased adoption of e-payment
channels induced by the Naira redesign and cashless policies.


3 The data are for wholesales transactions i.e. low volume and large value transactions. These are interbank transactions but do not reflect net settlement transactions which always have a net value of zero. Retail transactions are
settled through the net settlement.
FINANCIAL STABILITY REPORT – JUNE 2023

Table 4.3: Electronic Transactions
Payment
Channel
Number of Connected Terminals
Volume of Transactions
% Change
Volume
Value ₦’ Billion
%
Change
Value
Dec 2022
June 2023
End-Dec 2022
End-Jun 2023
Increase/
(decrease)
End-Dec

End-Jun

Increase/
(decrease)
%
ATMs


POS

Mobile
Money

Online
Transfers
(Internet/Web)

Mobile
App

USSD

Direct
Debit

ACH/NEF
T

Total


Figure 4.1 Volume of Electronic Transactions


Jul-Dec 2022
Jan-Jun 2023
ATMs
POS
Mobile Money
Online Transfers (Internet/Web)
Mobile App
USSD
Direct Debit
ACH/NEFT
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 4.2 Value of Electronic Transactions (₦’ Billion)


Box 4: THE CURRENCY REDESIGN POLICY
In October 2022, the Bank embarked on the redesign of the ₦1000, ₦500 and ₦200 currency
notes. The new notes were launched on November 23, 2022, by former President, Muhammadu Buhari, GCFR. Subsequently, modalities for the exchange of currency notes, the channels and set timelines were appropriately communicated to the public.
The policy draws largely from best global practices to redesign, produce and circulate new legal
tenders between five to eight years intervals. This practice enables the enhancement of the
security features and aesthetics of the currency, and therefore mitigates the risk of counterfeiting. Prior to the policy, the last currency redesign in Nigeria in 2014 only changed the ₦100
currency note to commemorate the country’s centenary.
The key objectives of the policy included maintaining more effective control of the stock of
money supply, streamlining the volume of banknotes in circulation, minimising cost of cash
management, promoting the adoption of e-payment channels; preventing illicit financial transactions; enhancing financial inclusion, and improving the effectiveness of monetary policy
transmission mechanism.
Following the implementation of the policy, CIC reduced by 67.39 per cent to ₦982.10 billion in
February 2023, compared with ₦3,012.06 billion in December 2022. Prior to the policy, CIC
increased by 106.31 per cent to ₦3,012.06 billion in September 2022, compared with ₦1,460
billion in December 2015. In addition, the exercise resulted in significant adoption of e-payment
channels, as the volume and value of electronic transactions rose by 102.43 per cent and 5.06
per cent to 24,661,450,659 and ₦974,681.74 billion, compared with that of the preceding half
of 2022.
Despite the substantial positive outcomes, the implementation of the policy resulted in some
unintended consequences. These included a nationwide cash crunch experienced during the

Jul-Dec 2022
Jan-Jun 2023
ATMs
POS
Mobile Money
Online Transfers (Internet/Web)
Mobile App
USSD
Direct Debit
ACH/NEFT
FINANCIAL STABILITY REPORT – JUNE 2023

period, largely induced by hoarding, trading and hawking of new currency notes as well as
speculative activities. Also, the payments system infrastructure was over stretched by the huge
volume of electronic transactions resulting in transaction failures. These unintended consequences also negatively impacted economic activities.
The Bank, however, responded by introducing several policy measures such as the cash swap
programme in partnership with super agents and banks to facilitate the exchange of old for the
new notes, especially among the underserved and rural communities. In addition, the Bank
intensified its awareness campaigns and collaborated with law enforcement agencies such as
the DSS, EFCC and ICPC to checkmate sharp practices observed in the course of the implementation.
Given the challenges encountered during the exercise vis-à-vis the need to provide adequate
liquidity for economic activities, the implementation timeline was extended to December 2023.


4.4.3 Other Developments in the Payments System
4.4.3.1 Payment System Vision 2025
The Bank commenced the implementation of the recommendations contained in the Payments System Vision 2025 within the review period. The document, launched in November
2022, provides a strategy for ensuring that an enabling environment is created for new
products, business models and technologies in the payments’ ecosystem.

Implementation of some of the key recommendations relating to regulatory sandbox open
banking, central bank digital currency, as well as quick response (QR) code and contactless
payments commenced.

4.4.3.2 Contactless Payments
Towards increasing the payment options available to Nigerians, the Bank issued the Guidelines on Contactless Payments in Nigeria to standardize operation of contactless payment
platforms. This initiative is expected to drive growth in low-value high-volume electronic
payments in the country.
4.4.3.3 Open Banking
The Bank issued the Operational Guidelines for Open Banking in Nigeria in the review
period which established the principles for data sharing across the banking and payments
ecosystem by stipulating data and API access requirements, as well as design and information security specifications. Full implementation of open banking has commenced with
the development of the Open Banking Registry, which will serve as a repository of APIs
shared under the open banking arrangement.

FINANCIAL STABILITY REPORT – JUNE 2023

4.4.3.4 Regulatory Sandbox
The Bank deployed a platform for the operation of the Regulatory Sandbox and initiated
admission of participants into the first cohort of the CBN Regulatory Sandbox within the
period. The Bank had opened the window for applications on December 6, 2022 and closed
it on February 1, 2023. As at the closure of the window, over 1,000 applications were received. Applications were still being reviewed.


FINANCIAL STABILITY REPORT – JUNE 2023

Deposit Insurance
During the period under review, the NDIC Act 2006 was repealed with the re-enactment of
the NDIC Act 2023 to strengthen its functions and powers. The key changes in the 2023
Act include the introduction of payment of insured deposits pending action in court, reconstitution of the Board, introduction of Target Fund Size/Ratio, application of Global Standing
Instruction Scheme in assets recovery, reduction of pay-out time of insured deposits and
reduction of insured deposit transfer from 90 days to 30 days.
5.1 Deposit Guarantee
The NDIC maintained deposit insurance coverage to commercial banks, merchant banks,
NIBs, MFBs, PMBs, PSBs and extended Pass-Through Deposit Insurance for MMOs. The
maximum coverage limit remained ₦500,000 per depositor except for MFB depositors with
₦200,000 limit.
5.2 Deposit Insurance Coverage
The number of fully insured depositors accounts, exclusive of MFBs and PMBs depositors,
at the coverage level of “₦500,000 and below” were 319,821,563 representing 98.10 per
cent of 326,019,837 accounts, compared with 256,620,968 accounts or 97.93 per cent of
271,235,170 accounts at end December 2022.

Table 5.1: Deposit Insurance Coverage (For CMNBs, PSBs and MMOs)

Category of Depositors
End-Dec 2022
End-Jun 2023
No. of Accts
No. of Accts
<=N500,000
256,620,968
319,821,563
>N500,000
5,614,255
6,198,341
Total
271,235,170
326,019,837
Fully insured to Total Accounts (%)
97.93
98.10

Thus, the percentage of fully insured accounts was above the range of 90 and 95 per cent
recommended in the Deposit Insurance Coverage Guidance Paper (2013) by the International Association of Deposit Insurers (IADI).

5.3 Deposit Insurance Funds
The NDIC maintains separate funds for CMBs, NIBs, MFBs and PMBs, and PSBs viz Deposit Insurance Fund (DIF), Non-Interest Deposit Insurance Fund (NIDIF), Special Insured
Institutions Fund (SIIF), and Payment Service Deposit Insurance Fund (PSDIF), respectively.

The balances in the DIF, NIDIF, SIIF, and PSDIF grew by 11.8 per cent, 20.89 per cent,
4.15 per cent and 5.5 per cent to ₦1.99 trillion; ₦23.73 billion; ₦177.85 billion and ₦226.15
million, compared with ₦1.78 trillion; ₦19.63 billion; ₦170.76 billion and ₦214.36 million at
end-December 2022, respectively. The increase in each of the Funds resulted from year
2023 premium collections, contributions, and provision for deposit insurance.


FINANCIAL STABILITY REPORT – JUNE 2023

Table 5.2: Balances of Insurance Funds
Fund Type
End-Dec 2022
End-Jun 2023
₦’ Billion
₦’ Billion
DIF
1,783.04
1,995.75
NIDIF
19.63
23.73
SIIF
170.76
177.85
PSDIF
0.21
0.23

5.4 Bank Liquidation
The total number of insured financial institutions in-liquidation increased to 650, comprising
49 DMBs, 546 MFBs, and 55 PMBs. These included 179 MFBs and four PMBs, whose
operating licences were revoked by the CBN in the review period. The NDIC commenced
their liquidation process to ensure the payment of guaranteed sum, recovery of debts owed
to closed banks, sales of physical assets and the distribution of liquidation dividends on the
uninsured sums.

5.5 Payment of Insured Deposits and Liquidation Dividend
5.5.1 Payments to Insured Depositors of Closed Insured Banks
i.
The NDIC paid ₦0.13 million as insured deposits to 51 depositors in the first half of
2023, compared with ₦450,204.03 paid to 10 depositors in the second half of 2022.


ii.
The sum of ₦0.19 billion was paid to 6,005 insured depositors of MFBs in-liquidation
in the first half of 2023, compared with ₦0.23 billion paid to 316 insured depositors at
end-December 2022.

iii. At end-June 2023, 152 insured depositors of closed PMBs were paid ₦5,317,605.02,
compared with ₦5,916,217.09 to 106 insured depositors in the preceding half year.

Table 5.3 Payments to Insured Depositors of Banks In-Liquidation
Table 1: Payments to Insured Depositors of Banks In-Liquidation

For the
Cumulative as at
End-Dec 2022
End-Jun 2023
End-Dec 2022
End-Jun 2023

₦’ Million
₦’ Million
₦’ Million
₦’ Million
DMBs

MFBs

PMBs

Grand Total


5.5.2 Payments to Uninsured Depositors
i.
The sum of ₦0.64 billion was paid to uninsured depositors of 49 DMBs In-Liquidation,
compared with ₦0.15 billion in the second half of 2022.

FINANCIAL STABILITY REPORT – JUNE 2023

ii.
Payment of ₦0.01 billion was made to uninsured depositors of 546 closed MFBs,
compared with nil payment at end-December 2022.

iii.
Similarly, the NDIC paid ₦77,006.50 to uninsured depositors of 55 closed PMBs,
compared with ₦0.20 billion to uninsured depositors of 51 closed PMBs at end-December 2022.

Table 5.4: Payments of Liquidation dividend to Uninsured Depositors of Banks In-Liquidation
Table 2: Payments to Uninsured Depositors of Banks In-Liquidation

For the
Cumulative as at

End-Dec 2022
End-Jun 2023
End-Dec 2022
End-Jun 2023

₦’ Million
₦’ Million
₦’ Million
₦’ Million
DMBs

MFBs

PMBs

Grand Total


5.5.3 Payments to Creditors of Banks In-Liquidation
No payment was made to creditors of 49 DMBs In-Liquidation in the first half of 2023, compared with the sum of ₦0.006 billion paid to 34 creditors in the second half of 2022. The
cumulative payment remained N1.28 billion to 1,027 creditors.

5.5.4 Payments to Shareholders of Banks In-Liquidation

The sum of ₦0.004 billion was paid to three shareholders of closed DMBs, compared with
₦0.002 billion paid to eight shareholders in the preceding half of 2022. The cumulative
payments at end-June 2023 were ₦4.896 billion to 980 shareholders, as against ₦4.892
billion to 977 shareholders at end-December 2022.

5.6 Recovery of Failed Banks’ Assets
5.6.1 Risk Assets Recovery
The sum of ₦0.05 billion was recovered from the assets of DMBs (₦0.02 billion), MFBs
(₦0.01 billion) and PMBs (₦0.02 billion) In-Liquidation, compared with ₦0.25 billion recovered from DMBs (₦0.18 billion), MFBs (₦0.02 billion) and PMBs (₦0.05 billion) In-Liquidation in the second half of 2022.
Table 5.5: Risk Assets Recoveries from Banks In-Liquidation

Cumulative as at

End-Dec 2022
End-Jun 2023
End-Dec 2022
End-Jun 2023

₦’ Million
₦’ Million
₦’ Million
₦’ Million
DMBs

MFBs

PMBs

Grand Total

FINANCIAL STABILITY REPORT – JUNE 2023

Cumulatively, the sum of ₦30.98 billion was recovered from DMBs In-Liquidation from 1994
to end-June 2023. Also, the sums of ₦0.32 billion and ₦0.81 billion were recovered from
MFBs and PMBs In-Liquidation, respectively, from September 2010 to end-June 2023.
5.6.2 Disposal of Physical Assets of Banks In-liquidation
The sum of ₦306.62 million was realised from disposal of physical assets and payment of
rent on properties of banks In-Liquidation. This comprised ₦215 million, ₦84.27 million and
₦7.35 million from DMBs, MFBs and PMBs In-Liquidation, respectively, compared with the
sum of ₦71.26 million realised in the second half of 2022, comprising ₦0.57 million, ₦48.88
million and ₦21.81 million from DMBs, MFBs and PMBs, respectively.
Table 5.6: Physical Assets Realization for Banks In-Liquidation

For the
Cumulative as at

End-Dec 2022
End-Jun 2023
End-Dec 2022
End-Jun 2023

₦’ Million
₦’ Million
₦’ Million
₦’ Million
DMBs

MFBs

PMBs

Grand Total


5.6.3 Realisation of Investments of Banks In-Liquidation
The sum of ₦984.66 million was realized from investments of banks In-Liquidation, comprising ₦969.07 million and ₦15.59 million for DMBs and MFBs In-Liquidation, respectively,
compared with the sum of ₦7.10 million realised from investments of MFBs In-Liquidation
in the second half of 2022.

Table 5.7: Realization of Investments of Banks In-Liquidation

For the
Cumulative as at

End-Dec 2022
End-Jun 2023
End-Dec 2022
End-Jun 2023

₦’ Million
₦’ Million
₦’ Million
₦’ Million
DMBs

MFBs

PMBs

Grand Total


5.7 Other Developments
5.7.1 Fit and Proper Persons Enquiries
During the review period, the NDIC received 347 requests to conduct due diligence on
prospective appointees of the financial institutions from the CBN, SEC, PENCOM and
NAICOM. A total of 311 requests were treated.

FINANCIAL STABILITY REPORT – JUNE 2023

5.7.2 Fidelity Insurance Coverage
In the first half of 2023, 34 out of 35 DMBs submitted Fidelity Insurance Coverage of their
employees. Twenty-four of the 34 DMBs were in compliance with section 44 of the NDIC
Act, 2023, while 10 had their cover below the 15.00 per cent threshold. Also, three of five
PSBs submitted evidence of Fidelity Insurance Coverage and maintained adequate Fidelity
Insurance Coverage of 15.00 per cent of the bank’s Paid-up Capital.

5.7.3 Whistle Blowing
During the review period, 199 of 240 whistle-blowing cases received from DMBs, on service
delivery inadequacies, theft and cash suppression, among others, were concluded, compared with 188 of 245 cases in the second half of 2022.


FINANCIAL STABILITY REPORT – JUNE 2023

PENSIONS
The key focus of the pension industry strategy in 2023, driven by the National Pension
Commission (PenCom), is to build on the gains of the past year and focus on a five-pronged
approach that steadily pursues and addresses identified gaps while creating more agile
institutions with a culture that supports innovation and continuous improvement. The approach includes increasing diversification of Pension Fund Assets, expanding coverage to
States and the informal sector, continuation of the engagement with the Federal Government towards reducing pension liabilities, enhancing public awareness, and improving the
capacity of the pension industry personnel.
Membership of pension schemes grew by 1.49 per cent to 10,009,049, driven largely by
increased compliance by the private sector, steady uptake of the Micro Pension Plan by
workers in the informal sector and State Government adoption of the Contributory Pension
Scheme (CPS). Also, Net Pension Assets under Management (AuM) grew by 11.80 per
cent to ₦16.76 trillion owing to a combination of returns on investments and contributions.
The portfolio comprised FGN Securities (64.34 per cent), Corporate Debt Securities (11.17
per cent), Money Market Instruments (9.35 per cent), Ordinary Shares (8.66 per cent), State
Government Securities (1.64 per cent), and ‘Others’ accounting for the balance of 4.84 per
cent (APPENDIX 5).
Similarly, the ratio of total pension assets to GDP grew to 8.01 per cent, compared with
7.41 per cent at end-December 2022, an indication of the increasing significance of contribution of the pension sub-sector to overall economic growth.

Figure 6.1: Total Pension Assets to GDP


Furthermore, the ratio of the pension industry's liquid assets to estimated pension payments
in the next twelve months grew to 864.65 per cent, compared with 299.90 per cent at endDecember 2022. The positive trend reflects the industry's resilience and capacity to meet
anticipated obligations to contributors.


End-Jun 2020
End-Dec 2020
End-Jun 2021
End-Dec 2021
End-Jun 2022
End-Dec 2022
End-Jun 2023
FINANCIAL STABILITY REPORT – JUNE 2023

Figure 6.2: Pension Funds Liquid Assets to Estimated Payments


6.1 Other Developments in the Nigerian Pension Industry
6.1.1 Retirement Savings Account Transfer
During the review period, a total of 59,358 RSAs transfers valued ₦111.68 billion were
concluded by the PenCom, compared with 45,794 transfers valued ₦274.88 billion in the
preceding half year.
6.1.2 Accrued Rights Payments
The sum of ₦25.44 billion was paid as Accrued Pension Rights to 5,431 beneficiaries, resulting in a cumulative payment of ₦1,026.98 billion to 220,185 RSA holders, from inception
in July 2007 to end-June 2023.
Table 6.1: Accrued Rights Payments


Private Sector Compliance
Private sector remittances in compliance with the provisions of the PRA 2014 have remained a challenge. Consequently, PenCom deployed recovery agents to go after defaulters to recover unremitted pension contributions, resulting in the recovery of ₦0.28 billion
principal contributions and ₦0.38 billion in penalties, compared with ₦1.15 billion and ₦0.87
billion, respectively, in the second half of 2022.


end-Jun-2021
end-Dec-2021
end-Jun-2022
end-Dec-2022
end-Jun-2023
Percentages
Payment Period
H2 2022
H1 2023
Number of Retirees

5,431
Accrued Rights Paid
₦1,168,329,000
₦25,439,968,000
FINANCIAL STABILITY REPORT – JUNE 2023

INSURANCE
The Nigerian Insurance sub-sector recorded mixed performance during the review period,
as shown by the key indicators such as total assets, premium income and solvency position.

7.1 Assets and Premium Income
Total assets grew by 18.48 per cent to ₦2.75 trillion, compared with ₦2.32 trillion at endDecember 2022. However, gross premium income declined by 20.59 per cent to ₦567.70
billion, from ₦714.9 billion in the preceding half year. Net premium income also declined by 38.19 per cent to ₦315.27 billion, from ₦510.10 billion at end-December 2022.
These developments were due largely to the impact of the reforms in the industry.

Table 7.1: Assets and Premium Income
Period
End-Dec 2022
₦ billions
End-June 2023
₦ billions
% Change

Gross Premium Income
714.9
567.70
20.59
Net Premium Income
510.1
315.27
38.19
Total (Gross) Claims
315.4
258.93
17.90
Total Assets
2.321
2.75
18.48
Source: NAICOM


7.2 Key Industry Financial Soundness Indicators
The key FSIs reflected mixed performance relative to the preceding half year. The highlights were as follows:
• The industry remained solvent with a 44.03 per cent CAR, measured as capital to
total assets. Though, this reflected a marginal decline of 0.24 percentage point, compared with 44.27 per cent at end-December 2022, it remained above the regulatory
threshold of 40 per cent.
• The ratio of liquid assets to current liabilities decreased by 6.2 percentage points to
122.70 per cent, compared with 128.90 per cent at end-December 2022. However,
this was adequate to accommodate significant claims.
• Premium debtors, as a percentage of gross premium, significantly increased by 2.71
percentage points to 8.52 per cent, compared with 5.81 per cent at end-Dec 2022.
• The retention ratio measured as insurance premium retained to total premium generated, decreased by 0.27 percentage points to 71.86 per cent, from 72.13 per cent
at end-December 2022. This reflected a slight decline in the industry’s capacity to
undertake big insurance policies.
• The combined ratio for the industry increased by 1.12 percentage points to 69.88
per cent, compared with 68.76 per cent at end-December 2022, reflecting improved
profitability of the insurance sector.

FINANCIAL STABILITY REPORT – JUNE 2023

7.3 Total Assets to Gross Domestic Product

The ratio of total assets to GDP declined by 0.96 percentage point to 3.13 per cent, from
4.09 per cent in the preceding period, reflecting the sector’s diminished contribution to the
economy.

Figure 7.1 Total Insurance Assets to GDP


7.4 Equity to total invested assets.
The ratio of owner’s equity holdings to total invested assets, increased by 30.85 percentage
points to 814.27 per cent, compared with 783.42 per cent at end-December 2022. This
depicts the sufficiency of the industry’s capital to absorb potential losses from its investments.

Figure 7.2: Equity to Total Invested Assets


End-Jun 2020
End-Dec 2020
End-Jun 2021
End-Dec 2021
End-Jun 2022
End-Dec 2022
End-Jun 2023

end-Jun-2021
end-Dec-2021
end-Jun-2022
end-Dec-2022
end-Jun-2023
Percentages(%)
FINANCIAL STABILITY REPORT – JUNE 2023

Table 7.2 Insurance Industry Dashboard
KEY INDICATORS
End-Dec

End-Jun

Change
CAR (Capital/Total Asset)
44.27
44.03
-0.24
Liquidity Ratio (liquid assets/current liabilities)
128.90
122.70
-6.2
Claims Ratio %
35.72
40.86
5.14
Expense Ratio %
33.04
29.13
-3.91
Combined Ratio %
68.76
69.88
1.12
Investment to Total Assets Ratio %
68.65
66.80
-1.85
Change in Gross Written Premium (in %)
35.30
39.28
3.98
Change in Net Written Premium (in %)
34.61
39.87
5.26
Change in Capital & Surplus (in %)
10.85
12.38
1.53
Premium Debtors as a % of Equity
5.69
5.44
-0.25
Premium Debtors as a % of Total Assets
2.30
2.88
0.58
Premium Debtors as a % of Gross Premium
5.81
8.52
2.71
Retention Ratio (in %)
72.13
71.86
-0.27
Return on Assets (in %)
2.19
3.18
0.99
Shareholder equity to total invested assets (Life insurance &
nonlife insurance)
783.42
567.27
27.59
OFCs' assets to gross domestic product: Insurance Corporations
4.09
4.66
13.94
OFCs' assets to gross domestic product: Pension Funds
26.41
30.41
15.15
Liquid assets to estimated pension payments in the next 12
months
299.90
864.65
188.31


FINANCIAL STABILITY REPORT – JUNE 2023

RISKS TO THE FINANCIAL SYSTEM
8.1 Credit Risk

Risk Rating (Medium Risk, Trending upward)

The PAR of MFBs remained above the regulatory thresholds, rising to 12.72 per cent from
11.25 per cent in the preceding half year. Similarly, the NPL of FCs remained above regulatory thresholds but decreased to 12.72 per cent from 19.96 per cent end-December 2022,
reflecting improved loan repayments. However, the NPL ratios for CMNBs and PMBs remained within regulatory thresholds and declined to 4.14 and 21.08 per cent from 4.21 and
22.07 per cent, at end-December 2022, respectively.
Credit risk is expected to trend upwards in the short to medium-term owing to reduction in
disposable income and obligors’ earning capacity, resulting from the challenging business
environment, largely induced by fuel subsidy removal and changes in the operations of the
foreign exchange market. Additionally, the Bank’s contractionary monetary policy stance
and the associated hike in lending rates could tighten financial conditions and constrain
loan repayments. However, improved credit risk management and enhanced implementation of the GSI are expected to moderate the trend.

8.2 Liquidity Risk
Risk Rating (Low Risk, Stable)
The banking industry recorded liquidity surfeit as the liquidity ratios of DMBs, PMBs, MFBs
and DFIs were above their regulatory benchmarks. This development was due largely to
the implementation of the Bank’s Naira redesign policy which significantly reduced the volume of currency outside the banking system.
The liquidity position is expected to remain in the short to medium term, but the enforcement
of the LDR policy will likely moderate the excess liquidity as banks lend more.

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

The domestic financial market remained largely resilient as reflected by the positive performance of the banking, capital market, pension and insurance sub-sectors during the period
under review.
Although market risk remained elevated owing to the high global and domestic interest
rates, tight market conditions, exchange rate pressure and downgrade in sovereign risk
rating.
However, the market conditions are expected to ease in the medium to long term, following
the sustained implementation of economic reforms, including the changes in the operations
of the foreign exchange market, the removal of the petroleum subsidy and increased oil
FINANCIAL STABILITY REPORT – JUNE 2023

output. These measures are expected to improve capital inflow and accretion to reserves
and moderate market risk.
8.4 Operational Risk
Risk Rating (Medium, Trending upward)
The total number of reported fraud cases and amount involved declined, although the actual
losses recorded during the review period increased. The frauds were predominantly committed via fake mobile applications, phony internet banking websites, fraudulent ATM withdrawals, pilfering of cash, cash suppression, conversion of customer’s deposits and unauthorised funds transfer.
Operational risk during the period was elevated due mainly to increased pressure on the
banks’ IT infrastructure and the increased knowledge gap following high attrition of employees in the financial services sector, as well as challenging economic conditions driven by
the upward review of electricity tariffs and removal of petroleum subsidy.
The risk is expected to remain high in the short to medium term. However, improved capacity building of employees, strengthened IT infrastructure, enhanced regulatory oversight, and adoption of efficient cost management practices, would continue to mitigate the
risks.

8.5 Cybersecurity Risk
Risk Rating (High Risk, Trending upward)
The high cybersecurity challenges were reflected in the increased sophistication in social
engineering incidents, unauthorised access to information, insider threats and
third-party risks. Vulnerabilities introduced by third-party collaboration and integration, ransomware attacks as well as high turnover rate of Information Technology personnel contributed to the rising trend. The increased adoption of digitized financial channels, cloud
services and remote work, also increased the risk of cyber-attacks.
Furthermore, third-party risks would remain elevated with the increasing integration of the
financial system, sustained outsourcing of services, increased use of shared services, and
technology interface between organisations.
However, enhanced implementation of risk-based cybersecurity framework and guidelines
for banks and OFIs, utilisation of the industry cyber-incident reporting portal, robust thirdparty risk management, staff training and consumer education would continue to mitigate
cyber-risks in the industry.

8.6 Macroeconomic Risk
Risk Rating (High Risk, Trending up)
During the review period, the domestic economy experienced sharp rise in inflation due to
the lingering effects of the Russia-Ukraine crisis, exchange rate pressure and removal of
petroleum subsidy, among others.
FINANCIAL STABILITY REPORT – JUNE 2023

The contractionary stance of the Bank to curb inflationary pressure could restrain access
to credit and affect economic growth. Also, the country’s inability to meet OPEC production
quota due to declining oil output could reduce foreign exchange inflows and accretion to
reserves. Furthermore, high debt levels, rising cost of debt service and low government
revenue could constrain the fiscal space, with adverse impact on the implementation of the
2023 budget.
However, enhanced monetary and fiscal policy coordination in line with government economic reforms will engender macroeconomic stability.


FINANCIAL STABILITY REPORT – JUNE 2023

Outlook
The global economic condition remained weak in the first half of 2023, largely driven by the
impact of geopolitical tensions, disrupted supply chains, high food and energy prices, high
inflation, tight monetary and financial conditions, high debt levels and limited fiscal buffers.
Consequently, global output growth was expected to slow down to 3.0 per cent in 2023.
Growth in AEs, EMDEs and SSAs are estimated at 1.5, 4.0 and 3.5 per cent, respectively
in 2023.
Inflation in most economies is expected to continue its downward trend, owing to tight monetary policy stance and falling energy and commodity prices. In the EMDEs, inflation is
expected to moderate, while in Nigeria, inflationary pressures are expected to maintain an
uptrend, largely on account of petroleum subsidy removal, increased electricity tariff and
operational changes in the foreign exchange market. However, enhanced monetary and
fiscal policy coordination in tandem with government economic reforms would engender
medium to long term macroeconomic stability.
External reserves are expected to improve, driven largely by the sustained implementation
of economic reforms including changes in the operations of the foreign exchange market,
the removal of petroleum subsidy and increased oil output.
Also, the domestic economy is expected to grow at 3.2 per cent in the second half of 2023,
mainly driven by the Information and Communication Technology sub-sector. Furthermore,
activities in the Nigerian financial market are expected to maintain positive performance
driven by increased participation in commodities trading and custodial services.
The financial system regulators would continue to enhance supervisory oversight of financial institutions to ensure their soundness and stability. Collaborative efforts of relevant
stakeholders would be enhanced to improve Nigeria’s status with the Financial Action Task
Force (FATF). Furthermore, the Bank would sustain its proactive supervisory effort, through
regular stress testing exercises and the deployment of Early Warning System tools to assess risk and vulnerabilities in the banking system.
In addition, the Bank would explore the huge potentials provided by Fintechs in expanding
the adoption of the eNaira through the introduction of more user-friendly features. The Bank
would continue to collaborate with relevant institutions to enhance the payments system
infrastructure to engender reliable and efficient payments system.
The pension industry is expected to sustain its performance as more private institutions
and state governments continue to comply. Also, steady uptake of the Micro Pension Plan
by workers in the informal sector is expected to contribute significantly to the growth of the
industry. Similarly, the insurance industry is anticipated to grow with the continued implementation of the recapitalisation policy drive and other market development initiatives.
Generally, the outlook in the second half of 2023 for the financial system remains positive
as the Bank and other regulatory agencies in collaboration with the fiscal authorities continue to adopt proactive policy measures to ensure a resilient and sound financial system.


FINANCIAL STABILITY REPORT – JUNE 2023

APPENDIX 1: INDICES OF SELECTED STOCK MARKETS

Bloomberg:


End-Dec 2020 (1)
End-Dec 2021 (2)
End-June 2022 (3) End-Dec 2022 (4)
End-June 2023
(5)
% Change (5)
& (4)
Nigeria NGX All-Share Index
40,270.72


19.0
South Africa JSE All-Share Index
59,408.68


4.1
Kenya Nairobi NSE 20 Share index
1,868.39


-6.0
Egypt EGX CASE 30
10,845.26


21.0
Ghana GSE All-Share Index
1,939.14


14.9
US S&P 500
3,756.07


-10.8
Canada S&P/TSX Composite
17,433.36


4.0
Mexico Bolsa
44,066.88


8.1
Brazil 'Bovespa Stock
119,017.20


7.6
Argentina 'Merval
51,226.49


116.2
Columbia COLCAP
1,437.89


-11.9
UK FTSE 100
6,460.52


1.1
France CAC 40
5,551.41


13.7
Germany DAX
13,718.78


16.0
Japan NIKKEI 225
27,444.17


27.2
China Shanghai SE A
3,640.46


3.7
India BSE Sensex
47,905.84


6.4
Selected International Stock Market Indices as at June 30, 2023
FINANCIAL STABILITY REPORT – JUNE 2023

APPENDIX 2: POLICY RATES OF SELECTED COUNTRIES IN 2022
Country/Region
Jun-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Developed Economies
Japan

Europe

UK

US

Canada

South Korea

New Zealand

Australia

Asia
Indonesia

Malaysia

BRICS
Brazil

Russia

India

China

South Africa

Other Emerging Economies & South America
Mexico

Chile

Colombia

Africa
Egypt

Ghana

Nigeria

Source: www.cbrates.com, central bank websites.

FINANCIAL STABILITY REPORT – JUNE 2023

APPENDIX 3: REAL SECTOR INTERVENTIONS: SUMMARY OF DISBURSEMENTS AND REPAYMENTS IN 2022

ITEM
End-Dec 2022
End-Jun 2023
S/N Intervention
Disbursement
(₦' Billion)
Repayment
(₦' Billion)
Disbursement
(₦ Billion)
Repayment
(₦ 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)

-
-
-

FGN BOND
-
-

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 Support Intervention Facility (TSIF)


Differentiated Cash Reserve Requirement (RSSF-DCRR)


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 for Production and Productivity


Youth Entrepreneurship Intervention Programme (YEDP)


Targeted Credit Facility (TCF)


Creative Industry Financing Initiative (CIFI)


National Youth Intervention Fund (NYIF)
-
-
-

-
FINANCIAL STABILITY REPORT – JUNE 2023

ITEM
End-Dec 2022
End-Jun 2023
S/N Intervention
Disbursement
(₦' Billion)
Repayment
(₦' Billion)
Disbursement
(₦ Billion)
Repayment
(₦ Billion)

Agri-business Small&Medium Entreprise Intervention Scheme (AgSMEIS)
1.32
2.75
4.19

-

TRADER MONI


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 Support Programme (NFSP)


NESF


Export Financing Initiative (EFI)

-
-

-
-

Presidential Fertilizer Initiative (PFI)


Export Development Fund (EDF)


Micro, Small and Medium Enterprise Development Fund (MSMEDF)


Shared Agency Network Expansion Facility (SANEF)


Salary Bail Out (SBF)


Excess Crude Account (ECA)

TOTAL


FINANCIAL STABILITY REPORT – JUNE 2023

APPENDIX 4: SELECTED FINANCIAL SOUNDNESS INDICATORS OF THE NIGERIAN BANKING INDUSTRY
Indicators

End-Jun
End-Dec
End-Jun
End-Dec
End-Jun
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

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

Return on assets

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

5. Other Financial Corporations Indicators
Shareholder equity to total invested assets (Life insurance &
nonlife insurance)

OFCs' assets to gross domestic product: Insurance Corporations

OFCs' assets to gross domestic product: Pension Funds

Liquid assets to estimated pension payments in the next 12
months

FSIs are computed based on IMF-FSI Manual

FINANCIAL STABILITY REPORT – JUNE 2023

APPENDIX 5: PENSION INDUSTRY PORTFOLIO FOR THE PERIOD ENDED 31 DECEMBER 2022
Asset Classes
End-Dec 2022
(₦ 'Billion)
End-Jun 2023
(₦ 'Billion)


Domestic Ordinary Shares
908.02
1,268.76
Foreign Ordinary Shares
108.99
192.25
Total FGN Securities
9,644.19
10,858.08
* Fed. Govt Bonds (HTM)
9,220.12
10,404.44
* Treasury Bills
198.29
192.43
* Agency Bonds (NMRC)
11.01
12.15
* Sukuk Bonds
159.74
152.34
* Green Bonds
55.03
96.72
State Govt Securities
166.14
277.36
Corp. Debt Securities
1,660.20
1,885.66
* Corporate Bonds (HTM)
1,352.44
1,408.53
* Corporate Bonds (AFS)
275.09
451.84
* Corporate Infrastructure Bonds
24.37
16.15
* Corporate Green Bonds
8.30
9.15
Money Mkt Instr.
1,984.58
1,577.39
Fixed Deposit/ Bank Acceptance
1,944.01
1,369.42
Commercial Papers
21.97
170.60
Foreign Money Mkt Instr.
18.59
37.37
Mutual Funds
82.81
115.15
FINANCIAL STABILITY REPORT – JUNE 2023

Open/Close Funds
66.54
93.97
REITs
16.27
21.18
Supra-National Bonds
10.47
9.60
Infrastructure Funds
112.96
127.44
Real Estate
217.60
218.60
Private Equities
48.38
57.43
Cash & Other Assets
48.27
173.84
Current Net Asset Value
14,992.62
16,761.55


FINANCIAL STABILITY REPORT – JUNE 2023

ACKNOWLEDGEMENTS - LIST OF MAJOR CONTRIBUTORS
S/N Name
Organisation
1. V.O. Ururuka (PhD.)
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. O. Abraham (PhD.)
Development Finance Department, CBN
7. S.O. Odeniran (PhD.)
Monetary Policy Department, CBN
8. C. P. Nwosu
Research Department, CBN
9. I.S. Omileye (PhD.)
Banking Supervision Department, CBN
10. A. I.Gambo (PhD.)
Statistics Department, CBN
11. Ibrahim Hamman
Statistics Department, CBN
12. E.O. Shonibare
Risk Management Department, CBN
13. Phebian N. Bewaji
Financial Markets Department, CBN
14. G.S. Oduntan
Other Financial Institutions Supervision Department, CBN
15. W.A. Arogundade
Other Financial Institutions Supervision Department, CBN
16. L.A. Sawa CFA
Reserve Management Department, CBN
17. N. Eke
Consumer Protection Department, CBN
18. M.K. Muazu
Consumer Protection Department, CBN
19. C. Oko-Oboh
Banking Services Department, CBN
20. J.K. Ajala
Banking Services Department, CBN
21. R. O. Yusuf (PhD.)
Payments System Management Department, CBN
22. O. Umeano CFA, PhD.
Securities and Exchange Commission
23. M. Mammada
Nigeria Insurance Commission
24. Bilyaminu Yakubu
National Pension Commission
25. H. S. Kollere
Nigeria Deposit Insurance Corporation

The Report is produced and supervised by the Financial Policy and Regulation Department

CHIBUZO A. EFOBI
Director, Financial Policy and Regulation Department

FINANCIAL STABILITY REPORT – JUNE 2023