Central Bank of Nigeria
FINANCIAL
STABILITY
REPORT
DECEMBER 2022
Central Bank of Nigeria
FINANCIAL
STABILITY
REPORT
DECEMBER 2022
FINANCIAL STABILITY REPORT – DECEMBER 2022

Classified as

CONTENTS


FINANCIAL STABILITY REPORT – DECEMBER 2022

iii


Anti-Money Laundering, Combating the Financing of Terrorism and

Regulation and Supervision of Non-Interest Financial Institutions in
Nigeria

3.10.6
Code of Corporate Governance for Banks and Guidelines for WhistleBlowing


FINANCIAL STABILITY REPORT – DECEMBER 2022

iv


4.1
4.2
4.2.1
Oversight & Compliance Assessment of Payments Service Providers .... 65


6.1
6.2

7.1
7.2
7.3


APPENDIX 3: REAL SECTOR INTERVENTIONS: SUMMARY OF DISBURSEMENTS AND
APPENDIX 4: PENSION INDUSTRY PORTFOLIO FOR THE PERIOD ENDED 31 DECEMBER 2022


FINANCIAL STABILITY REPORT – DECEMBER 2022

v

LIST OF FIGURES
FIGURE 2.1: CONCENTRATION RATIOS OF THE BANKING INDUSTRY ASSETS AND DEPOSITS
FINANCIAL STABILITY REPORT – DECEMBER 2022

vi

FIGURE 3.5: INDUSTRY EXPOSURE TO OIL & GAS, MANUFACTURING AND SERVICES


FINANCIAL STABILITY REPORT – DECEMBER 2022

vii

LIST OF TABLES
TABLE 2.7: MATURITY STRUCTURE OF MFBS LOANS AND ADVANCES AND DEPOSIT
TABLE 2.12: FOREIGN AND DOMESTIC PORTFOLIO PARTICIPATION IN EQUITIES
TABLE
2.15:
GEZAWA
COMMODITY
MARKET
AND
EXCHANGE
(GCMX)
TABLE 2.20: WOMEN AND WOMEN-OWNED ENTERPRISES TRANSACTIONS ON THE
TABLE 3.1 SELECTED FINANCIAL SOUNDNESS INDICATORS OF THE NIGERIAN BANKING
FINANCIAL STABILITY REPORT – DECEMBER 2022

viii

TABLE 5.3 DISPOSAL OF PHYSICAL ASSETS AND REALISATION OF INVESTMENTS FROM


FINANCIAL STABILITY REPORT – DECEMBER 2022

ix

LIST OF BOXES


FINANCIAL STABILITY REPORT – DECEMBER 2022

x

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
CIS
Collective Investment Scheme
CMNBs
Commercial, Merchant and Non-interest Banks
CMOs
Capital Market Operators
COB
Currency Outside Banks
CODC
Currency Outside Depository Corporations
CPI
Consumer Price Index
CPS
Contributory Pension Scheme
CRMS
Credit Risk Management System
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
FINANCIAL STABILITY REPORT – DECEMBER 2022

xi

Acronym
Description
ECB
European Central Bank
EGX CASE 30
Egypt Stock Exchange (Cairo and Alexandria Stock Exchange) 30
Stock Index
EMDEs
Emerging Markets and Developing Economies
ESG
Environmental, Social & Governance
ETF
Exchange Traded Funds
EVD
Ebola Virus Disease
FAO
Food and Agriculture Organisation
FATF
Financial Action Task Force
FCs
Finance Companies
FGN
Federal Government of Nigeria
FMBN
Federal Mortgage Bank of Nigeria
FPI
Foreign Portfolio Investment
FRACE
Financial Regulation Advisory Council of Experts
FSIs
Financial Soundness Indicators
FSR
Financial Stability Report
FSRCC
Financial Services Regulation Co-ordinating Committee
GCMX
Gezawa Commodity Market and Exchange Limited
GDP
Gross Domestic Product
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
FINANCIAL STABILITY REPORT – DECEMBER 2022

xii

Acronym
Description
MENA
Middle East and North African Countries
MFBs
Microfinance Banks
MHSs
Money Holding Sectors
MICEX
Moscow Interbank Currency Exchange
MMOs
Mobile Money Operators
MoUs
Memoranda of Understanding
MPR
Monetary Policy Rate
MSMEs
Micro, Small and Medium Enterprises
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
OFIs
Other Financial Institutions
OPEC
Organisation of Petroleum Exporting Countries
ORB
OPEC Reference Basket
OTC
Over-the-Counter
FINANCIAL STABILITY REPORT – DECEMBER 2022

xiii

Acronym
Description
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
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 – DECEMBER 2022

xiv

GOVERNOR’S STATEMENT

he December 2022 edition of the Financial Stability Report (FSR) highlights developments in the financial system during the second half of 2022. Stronger than expected
tightening of financial conditions, supply shocks occasioned by the Russia-Ukraine
war, and the resurgence of Covid-19 pandemic in some parts of China, resulted in sluggish
global growth. Consequently, the 3.40 per cent global output estimate for 2022, was 2.5
percentage points lower than the estimate in 2021.

Growth in the Advanced Economies (AEs) declined to 2.7 per cent in 2022, from 5.7 per
cent in 2021. Similarly, growth in Emerging Markets and Developing Economies (EMDEs)
was 3.9 per cent in 2022, compared with the 6.50 per cent recorded in 2021. In the same
vein, growth in Sub-Saharan Africa (SSA) was estimated at 3.80 per cent, lower than the
4.00 per cent in 2021. Globally, inflationary pressure remained elevated, albeit at a lower
rate relative to the first half of 2022. Inflation in advanced countries moderated in the second half of 2022, owing largely to the aggressive contractionary stance of the monetary
authorities.

In Nigeria, economic recovery was sustained, although at a slower pace, relative to the
level in the first half of 2022. Output grew by 2.91 per cent, compared with 3.32 per cent
in the first half of 2022, driven by the non-oil sector, specifically, the services and industry
sub-sectors. Credit to the private sector continued to grow, resulting from policies encouraging lending to key sectors of the economy.

Gross external reserves decreased to US$36.61 billion, from US$39.16 billion at end-June
2022, reflecting a combination of heightened demand and slow accretion to reserves.
Despite the headwinds in the macroeconomic space, the financial sector remained resilient and stable, owing to the sustained implementation of various regulatory and supervisory measures and market development initiatives. The outcomes of these actions were
reflected in financial soundness indicators which remained within regulatory thresholds
during the period.

The outlook for both global and domestic economic recovery remains uncertain as a result of significant downside risks from disruption to global supply chains, the Russia-Ukraine
crisis, heightened inflationary pressures across several economies and decline in economic activities in China following the resurgence of Covid-19. Also, monetary policy normalisation across major economies, the rising debt levels, and recession concerns, constitute major challenges to global growth. On the domestic front, the economy is projected
to grow by 2.88 per cent in 2023.

The Bank will continue to provide policy support to the priority sectors of the economy to
ensure a stable, sound, and resilient financial system.


Godwin I. Emefiele, CON
Governor, Central Bank of Nigeria

T
FINANCIAL STABILITY REPORT – DECEMBER 2022

xv

FOREWORD

rowth in the global financial system during the review period was accentuated by headwinds and uncertainties occasioned from tightening of financial conditions, the Russia-Ukraine war, and the resurgence of Covid-19 in
some parts of China.

Notwithstanding these challenges, the Nigerian financial system remained stable owing to coordinated policy measures which continued to yield positive results, as key
financial soundness indicators were within the prudential requirements. Furthermore,
top-down solvency and liquidity stress tests and contagion risk analysis revealed the
resilience of the banking system and its ability to cope with severe macroeconomic
shocks. In addition, the pension, capital market and insurance sub-sectors continued
to contribute immensely to the resilience and stability of the financial system.

This edition of the FSR is divided into eight sections. The first section examines global
and domestic trends. Section two discusses financial system developments, while the
third highlights key stability issues, as well as regulatory and supervisory activities. Section four discusses key developments in the payments system, while sections five, six
and seven focus on the Nigeria Deposit Insurance Corporation, pension and insurance sub-sector. The key risks and the outlook for financial stability are presented in
sections eight and nine, respectively.

Overall, the Report highlights financial system conditions and the near-term outlook,
as well as the sustained efforts by Financial Sector Regulators in promoting the safety
and soundness of Nigeria’s financial system.

The Bank will continue to identify and assess financial system vulnerabilities and risks,
with a view to implementing appropriate regulatory measures to enhance its resilience.


Aishah N. Ahmad, CFA
Deputy Governor, Financial System Stability


G
FINANCIAL STABILITY REPORT – DECEMBER 2022

xvi

EXECUTIVE SUMMARY

he growth in global economy marginally improved in the second half of 2022.
Gross Domestic Product (GDP) was estimated to be higher at 3.40 per cent, than
3.10 per cent at end-June 2022. Although an improvement, the growth recorded
was dampened by the effects of the lingering Russia-Ukraine crisis, heightened geopolitical tensions, global supply chain disruptions, and rising energy and commodity
prices. The domestic economy grew by 2.91 per cent at end-December 2022, relative
to 3.32 per cent at end-June 2022.

Global inflation remained elevated in the second half of 2022, prompting successive
policy rate hikes by most central banks. In line with global trends, headline inflation
(year-on-year) in Nigeria rose to 21.34 per cent in December 2022, from 18.60 per cent
in June 2022, driven, largely, by persisting high energy prices, rise in transport and logistics costs, global supply chain disruptions, security challenges and flooding in some
parts of the country.

The rate hikes by major central banks contributed to tightened financial conditions,
leading to asset repricing and higher cost of capital, constituting risks to financial stability. In particular, the rate hike in the United States contributed to the depreciation
of major currencies against the U.S. dollar in the second half of 2022.

In the domestic economy, lending and deposit rates maintained an upward trajectory as did yields across all tenors of treasury securities. Gross external reserves decreased by 6.51 per cent to US$36.61 billion at end-December 2022.

The Bank sustained its implementation of various regulatory and supervisory measures,
including onsite examinations, off-site surveillance, AML/CFT/CPF assessments, the
Global Standing Instruction (GSI) policy, and issued guidance notes to enhance the
safety and soundness of banks and safeguard public confidence in the banking industry. These measures facilitated the attainment of financial soundness indicators
that were largely within prudential benchmarks. The banking industry reflected increased competition as the Herfindahl Hirschman Index (HHI) of 944.96 and 933.89, for
deposits and assets respectively, were lower compared with end-June 2022.

The banking industry capital adequacy ratio, at 13.76 per cent, was above the regulatory threshold of 10 per cent and the capacity of banks’ capital to withstand losses
on non-performing loans also improved significantly. Results of the stress tests showed
that the industry was resilient to solvency and liquidity shocks. The capacity of the
banking industry to make informed lending decisions was improved with the addition
of 15.42 million uniquely identified credit records. Also, consumer confidence in the
banking industry was enhanced with the resolution and closure of 98.54 per cent of
reported consumer complaints.
T
FINANCIAL STABILITY REPORT – DECEMBER 2022

xvii

The Bank continued its targeted interventions in critical sectors of the economy and
intensified its debt recovery drive. The Payments System Vision 2025 (PSV 2025) was
launched to drive digital payments and align with fast-paced innovations in the
global payments ecosystem. The Bank also facilitated the interoperability of eNaira
with financial institutions’ platforms and onboarded some Payments Service Providers
(PSPs) to provide eNaira as a payment option. Unstructured Supplementary Service
Data (USSD) code (*997#) for eNaira transactions was also introduced.

Performance in the Nigerian capital market and other subsectors during the review
period were mixed, as the NGX ASI, equity market capitalisation and foreign portfolio
transactions decreased, while government and corporate debt market capitalisation
increased. The pension industry grew in terms of Assets under Management (AuM)
and the number of pension contributors. Similarly, the insurance industry grew as total
assets, net premium income and gross claims increased.

The key risks to financial system stability included increasing threats of cyber-attacks,
elevated inflation, rising sovereign debt and debt service obligations, exchange rate
pressures and lingering spill-over effects of the persisting Russia-Ukraine crisis.

Consequently, the Bank and other financial system regulators continued to implement
appropriate measures and strive extensively to mitigate these risks. Overall, the outlook for financial stability remains optimistic, given the robust policy measures
adopted towards enhancing the resilience of the financial system.


FINANCIAL STABILITY REPORT – DECEMBER 2022

FINANCIAL STABILITY REPORT – DECEMBER 2022

1.0
ECONOMIC AND FINANCIAL DEVELOPMENTS
1.1
Global Developments
1.1.1 Output
The global economy showed a marginal improvement in the second half of 2022 as
estimated Gross Domestic Product (GDP) grew by 3.40 per cent, as against the 3.10
per cent recorded at end-June 2022. However, output growth in the review period
was significantly lower than 5.9 per cent achieved in the corresponding period of
2021. The sluggish growth was due largely to stronger-than-expected tightening of financial conditions, supply shocks occasioned by the Russia-Ukraine war and the resurgence of Covid-19 pandemic in some parts of China.

Growth in the Advanced Economies (AEs) was estimated at 2.7 per cent at end-December 2022, compared with 2.2 per cent at end-June 2022. In tandem with the
global trend, output growth in the AEs at end-December 2022 was lower than the 5.0
per cent recorded in the corresponding period of 2021.

In the Emerging Markets and Developing Economies (EMDEs), growth was estimated
at 3.9 per cent at end-December 2022, compared with 2.4 and 6.50 per cent, at endJune 2022 and end-December 2021, respectively.

Growth in the Sub-Saharan Africa (SSA) region was estimated at 3.8 per cent at endDecember 2022, compared with 3.6 per cent and 4.0 per cent, recorded at end-June
2022 and end-December 2021, respectively.

Figure1.1 Global Growth

Source: IMF’s World Economic Outlook Update, July 2022, *National Bureau of Statistics (NBS)


FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 1.1: Global Growth
Region/Country
Year-on-Year (%)

June

Dec

World

Advanced Economies


2.7
United States

Euro Area

Japan

United Kingdom

Canada

Emerging Market
and Developing
Economies

China

MENA

Sub-Saharan Africa

Nigeria*

Source: IMF’s World Economic Outlook Update, July, 2022, *National Bureau of Statistics (NBS)

1.1.2 Inflation
Price pressure remained elevated in the AEs during the review period, albeit moderately relative to the situation in the first half of 2022. Inflation in the advanced countries
moderated to 7.40 per cent at end-December 2022, from 8.80 per cent in the first half
but significantly higher than the 2.80 per cent recorded at end-December 2021. This
pattern was observed in most advanced countries, owing largely to the aggressive
tightening stance of the monetary authorities except in the Euro area, where the uptick in prices continued in the second half of 2022, reflecting the asymmetric impact
of the surge in energy, commodity and food prices on member states.

In the EMDEs, inflation rose to 9.93 per cent at end-December 2022, from 6.2 per cent
at end-June 2022. In the Middle East and North Africa (MENA), inflation rose to 13.9
per cent at end-December 2022, from 6.3 per cent at end-June 2022. The key drivers
of inflation included rising energy, food, and commodity prices, as well as supply chain
disruptions following the Russia -Ukraine war. However, in SSA, inflation slightly receded
to 12.2 per cent at end-December 2022, from 13.00 per cent at end-June 2022, mainly
owing to contractionary monetary policy measures during the period.


FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 1.2 Global Inflation


Table 1.2: Global Inflation
Region/Country

June

Dec

Advanced
Economies
1.7


United States

Euro Area

Japan
0.5

0.5

-0.2
0.49
-0.23
United Kingdom

Emerging
Market
and
Developing
Economies


9.93
Middle
East
and
North Africa


13.9
Sub-Saharan Africa

Source: WEO Update, July 2022

1.1.3 Oil Prices
The prices of crude oil declined in the second half of 2022, due to weak economic
growth, occasioned by monetary tightening, geo-political tensions, and resurgence
of the Covid-19 pandemic in some parts of China.


-4.5


2.3
8.1


3.8
0.8
1.9

-1.8


World
Aes
USA
EU A
JPN
UK
Canada
EMDEs
China
MENA
SSA
Nig.
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 1.3: Oil Prices (US$ Per Barrel)


Table 1.3: Oil Prices (US$ Per Barrel)

EndDec.

EndDec.

EndDec.

EndDec.

EndJun.

EndDec

OPEC
Reference
Basket
(ORB) (US$)

ICE Brent (US$)

West
Texas
Intermediate
(WTI) (US$)

Bonny Light (US$)

Source: OPEC and Reuters

1.1.4 International Stock Markets
The performance of the international stock markets was generally mixed in 2022, influenced majorly by growing trade uncertainties, political challenges, the Russia-Ukraine
war and other geopolitical tensions. See figures below and Appendix 1.


End-Dec 2018
End-Dec 2019
End-Dec 2020
End-Dec 2021
End-Jun 2022
End-Dec 2022
Bonny Light (US$)
West Texas Intermediate (WTI) (US$)
ICE Brent (US$)
Reference Basket (ORB) (US$)
FINANCIAL STABILITY REPORT – DECEMBER 2022

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 (1)
End-Dec 2021 (2)
End-June 2022 (3)
End-Dec 2022 (4)
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 (1)
End-Dec 2021 (2)
End-June 2022 (3)
End-Dec 2022 (4)
US S&P 500
Canada S&P/TSX Composite
Mexico Bolsa

End-Dec 2020 (1)
End-Dec 2021 (2)
End-June 2022 (3)
End-Dec 2022 (4)
Brazil Bovespa Stock
Argentina Merval
Columbia COLCAP
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 1.8: Indices of Asia Stock Markets


1.1.5 Foreign Exchange Markets
The commencement of monetary policy normalisation in the US in 2022, with the attendant strengthening of the US dollar, precipitated currency pressures in most economies. Consequently, most currencies depreciated against the U.S. dollar in the second half of 2022, thereby worsening the debt burden of debtor nations.


End-Dec 2020 (1)
End-Dec 2021 (2)
End-June 2022 (3)
End-Dec 2022 (4)
Japan NIKKEI 225
China Shanghai SE A
India BSE Sensex

End-Dec 2020 (1)
End-Dec 2021 (2)
End-June 2022 (3)
End-Dec 2022 (4)
UK FTSE 100
France CAC 40
Germany DAX
Figure 1.7: Indices of Europe Stock Markets
FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 1.4: Performance of Selected Currencies against the US Dollar
Country/Region Currency
End-Dec

(1)
End-Dec

(2)
End-Jun
2022 (3)
End-Dec

(4)
%
Change
(3) & (4)

%
Change
(2) & (4)
AFRICA
Nigeria
Naira

South Africa
Rand

Kenya
Shilling

Egypt
Pound

Ghana
Cedi

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

Renmin
bi

India
Rupee


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

1.1.6 Monetary Policy Rates
In response to rising inflationary pressures, monetary policy rates were reviewed upward by most central banks during the review period. Although this had a salutary
effect on inflation, it negatively impacted prices of fixed income securities, posing a
risk to holders of such securities, especially financial institutions. See appendix 2.

1.2
Domestic Macroeconomic Developments
1.2.1 Output
Domestic economic recovery was sustained in the second half of 2022 as a result of
renewed business confidence, albeit at a slower pace relative to the first half of the
year. Output grew by 2.91 per cent in the second half of 2022, compared with the
3.32 per cent recorded in the first half of 2022.

FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 1.9: Gross Domestic Product Growth

Source: National Bureau of Statistics

The non-oil sector remained the major driver of output growth by contributing 4.08
percentage points, driven by the improved performance of the services sector. However, the oil sector contracted, contributing negative 1.17 percentage points to the
growth in real GDP.

Sectoral analysis revealed that the services sector maintained its steady improvement, contributing 3.87 percentage points, compared with 3.50 percentage points in
the preceding half year, owing majorly to the growth in ICT. The contribution of the
agriculture sector dropped marginally to 0.48 percentage point, from 0.50 percentage point in the preceding half of 2022. The performance of the industry sector improved relative to the level in the preceding half year.

The continued positive growth post Covid-19 pandemic is expected to sustain the repayment capacity of obligors which would favourably impact financial system stability.

Table 1.5: Sectoral Contributions to real GDP
Source: National Bureau of Statistics

1.2.2 Inflation
Inflationary pressures persisted in the second half of 2022, with increases in both food
and non-food components of the consumer price index (CPI) basket. Headline inflation (year-on-year) rose to 21.34 per cent in December 2022, from 18.60 per cent in
June 2022. The increase was driven, largely, by the persisting high energy prices, rise

H2 2018
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
H1 2022
H2 2022
PER CENT
Sector
H2 2021
H1 2022
H2 2022
Agriculture
0.68
0.50
0.48
Of which: Crop Production
0.68
0.45
0.48
Industry
-0.17
-1.05
-0.87
Of which: Oil
-0.69
-1.64
-1.17
Manufacturing
0.29
0.42
0.04
Services
3.50
3.87
3.30
Of which: ICT
1.02
1.49
1.54
GDP Growth
4.01
3.32
2.91
FINANCIAL STABILITY REPORT – DECEMBER 2022

in transport and logistics costs, global supply chain disruptions, as well as security challenges and flooding in some parts of the country.

Inspite of the rising inflationary trend, banks’ deposit liabilities rose by 8.02 per cent
while non-performing loans ratio declined to 4.21 per cent at end-December 2022,
from 4.95 per cent at end-June 2022. The expected negative impact of rising inflation
on savings and borrowers’ capacity to repay were mitigated by regulatory initiatives,
such as the Cashless, Naira redesign, and Global Standing Instruction (GSI) policies.

Figure 1.10 Inflationary Trend (Year-on-Year)

Source: National Bureau of Statistics

1.2.3 Fiscal Operations of the Federal Government
Provisional data on Federal Government Retained Revenue, at N3,340.03 billion in the
second half of 2022, was below the budget benchmark by 33.00 per cent, reflecting
revenue challenges. Provisional aggregate expenditure, at N6,465.26 billion in the second half of 2022, was lower than the prorated budget by 25.34 per cent, owing to the
significant shortfall in capital expenditure. Consequently, the fiscal operations of the
Federal Government resulted in a lower deficit of N3,125.23 billion than the budgeted
deficit of N3,675.11 billion.

Figure 1.11: Federal Government Fiscal Operations (N Billion)

Source: OAGF & CBN Staff Estimates

2021 H1
2021 H2
2022 H1
2022 H2
Headline (Y-on-Y)
Core (Y-on-Y)
Food (Y-on-Y)

2020 Second Half
2021 First Half
2021 Second Half
2022 First Half
2022 Second Half
Retained Revenue
Aggregate Expenditure
Overall Balance
FINANCIAL STABILITY REPORT – DECEMBER 2022

The difference between total revenue and expenditure was bridged by borrowing
from domestic and external sources. Thus, the consolidated public debt stock at endDecember 2022 stood at N46,250.37 billion, an increase of 7.95 per cent over the level
at end-June 2022. This consist of 59.56 per cent and 40.44 per cent of domestic and
external debt, respectively. The debt stock represented 22.85 per cent of GDP, which
was below the Medium-Term Debt Strategy (MTDS) threshold of 40.0 per cent.

1.2.4 External Reserves
Gross external reserves decreased by 6.51 per cent to US$36.61 billion at end-December 2022. A breakdown of the external reserves indicated that the CBN, FGN and
Federation
holdings
were
US$34,984,767,945.86,
US$1,622,824,660.30
and
US$634,769.18 (95.57, 4.43 and 0.00 per cent, respectively. Furthermore, 75.77 per cent
of the reserves were held in US dollars, 13.72 per cent in Special Drawing Rights (SDRs),
9.40 per cent in Renminbi and 1.11 per cent in other currencies.

Total inflow to the external reserves decreased by 17.74 per cent to US$13.49 billion at
end-December 2022. This was largely attributed to a decline in receipt of third-party
funds and purchases of foreign exchange. There was also an inflow of US$1.250 billon
(FGN Euro bond issuance) in the preceding period while there was none in the review
period.

Total outflow decreased by 4.97 per cent to US$16.05 billion at end-December 2022,
driven largely, by decrease in payments at the Investors’ & Exporters’ (I&E) FX window.

Figure 1.12: External Reserves Position (US$ Billions)


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


Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22
Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22
Period
Inflow
Outflow
Net flow
End-Dec 2021
26.01
22.27
3.74
End-Jun 2022
16.40
16.89
(0.49)
End-Dec 2022
13.49
16.05 (2.56)
FINANCIAL STABILITY REPORT – DECEMBER 2022

2.0
DEVELOPMENTS IN THE FINANCIAL SYSTEM
2.1
Monetary and Credit Developments
Broad money supply (M3) increased by 17.32 per cent to ₦52,140.94 billion at endDecember 2022. The growth exceeded the 2022 programme target of 14.92 per cent,
driven by the 36.46 per cent increase in net domestic assets (NDA), which outweighed
the 54.52 per cent decline in net foreign assets (NFA). The contribution of NDA to the
growth in broad money assets stood at 28.8 percentage points, with net claims on
central government and claims on other sectors contributing 24.3 and 15.5 percentage points, respectively.

Table 2.1: Growth Rates of Monetary Aggregates
% Change (Over preceding December)
Jun 21
Dec 21
Jun 22
Dec 22
Net Foreign Assets

Net Domestic Assets

Domestic Claims

Net Claims on Central Government

Claims on Other Sectors

Other Items (Net)

Currency Outside Depository Corporations

Transferable Deposits

Narrow Money Supply (M1)

Other Deposits

Monetary Liabilities (M2)

Total Monetary Liabilities (M3)


On the liability side, growth in M3 was attributed to the 19.86 and 17.71 per cent
growth in Transferable Deposits and Other Deposits, respectively. However, Currency
Outside Depository Corporations (CODC) sustained its downward trajectory, declining
by 12.65 per cent, reflecting increased adoption and usage of electronic payment
channels coupled with the naira redesign policy of the Bank. The major contributor to
the growth in M3 was Other Deposits at 10.5 percentage points, followed by Transferable Deposits at 6.8 percentage points.

2.1.1 Market Structure of the Banking Industry
In the second half of 2022, the Herfindahl Hirschman Indices (HHI) of 944.96 and 933.89,
for deposits and assets, was lower when compared with 993.21 and 954.53 at endJune 2022, respectively, reflecting increased competition in the banking industry. The
shares of individual banks ranged from 0.07 to 14.76 per cent in deposits and 0.34 to
17.96 per cent in assets in the review period. However, six banks accounted for 68.63
and 69.02 per cent of total deposits and assets, compared with 61.20 and 68.80 per
cent in the first half of 2022, respectively.

FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 2.1: Concentration Ratios of the Banking Industry Assets and Deposits


2.1.2 Sectoral Distribution of Credit
Total credit to private sector grew by 9.68 per cent to N29,445.87 billion at end-December 2022, reflecting post Covid-19 improvement in economic activities and the
Bank’s sustained efforts to spur credit delivery to growth-enhancing sectors of the
economy.

Credit utilisation increased across the three main sectoral categories above their levels in the preceding half year, with the Industry sector recording the highest growth of
14.00 per cent, followed by the Agriculture and Services sectors at 11.16 and 6.39 per
cent, respectively. The Services and Industry sectors remained dominant, accounting
for 52.84 and 41.01 per cent of the total credit, respectively.

Table 2.2: Sectoral Credit Allocation
ITEM
Dec-21
Jun-22
Dec-22
Percentage
Share in Total
% Change
Between
₦’’M
₦’’M
₦’’M
Dec-

Jun-

Dec-

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

[a] Agriculture


11.1

[b] Industry


39.4

41.0

6.87

of which Manufacturing


16.8

18.0

10.9

22.7

[c] Services


54.4

52.8

12.4

6.39
of which Finance, Insurance & Capital Market


28.7

Trade/General Commerce


12.0

TOTAL PRIVATE SECTOR
CREDIT
24,378.19
26,846.40
29,445.87

10.1


Dec 19
Jun 19
Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
HHI
Concentration Ratio
CR(Deposits)
CR( Assets)
CR( Largest-Deposits)
CR (Largest-Assets)
HHI (Deposits) (rhs)
HHI (Assets) (rhs)
FINANCIAL STABILITY REPORT – DECEMBER 2022

2.1.3 Consumer Credit
Consumer credit grew by 11.80 per cent to ₦2,318.63 billion at end-December 2022,
from ₦2,073.76 billion at end-June 2022. A disaggregation of consumer credit revealed that personal and retail loans accounted for 75.59 and 24.41 per cent, compared with 73.49 and 26.51 per cent, respectively, at end-June 2022. It accounted for
8.10 per cent of total credit to the private sector, compared with 7.22 per cent in the
second half of 2022. Consumer credit as a proportion of total credit to the private
sector remained relatively stable over time.

Figure 2.2 Consumer Credit

2.2
Other Financial Institutions
The potential for financial inclusion was enhanced by the licensing of five Microfinance Banks (MFBs) and five Finance Companies (FCs) in the second half of 2022.
This development increased the total number of Other Financial Institutions (OFIs) to
6,707 at end-December 2022.

Table 2.3: Composition of Other Financial Institutions
S/N
Type
End-June, 2022
End-December, 2022

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
6,697
6,707

The total assets of OFIs, excluding the BDCs, increased by 10.52 per cent to N6,240.55
billion at end-December 2022, driven largely by net loans and advances, and investments which grew by 4.10 and 25.73 per cent, respectively. On the liability side, bor0.00

Jun-20
Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
Per Cent
Consumer credit (rhs)
Ratio of consumer credit to claims on private sector (lhs)
FINANCIAL STABILITY REPORT – DECEMBER 2022

rowings and long-term liabilities increased by 18.25 per cent and 43.37 per cent, respectively; while shareholders’ funds increased marginally by 1.08 per cent to N741.86
billion at end-December 2022.

The size of OFIs, measured by OFIs’ assets to GDP, rose by 1.03 percentage points to
3.131 per cent, from 3.126 per cent, driven largely by the increase in assets of OFIs
(14.042 per cent) which outweighed the slight improvement in economic activities in
the review period. The increase in the assets of OFIs was attributable to the new enhanced capital regime and the licensing of new OFIs.

Figure 2.3 OFIs Asset to GDP (Annualised)


Figure 2.4 Consolidated Balance Sheet of OFIs


The asset structure of OFIs at end-December 2022 showed the continued dominance
of DFIs, which accounted for 60.48 per cent. MFBs, PMBs and FCs accounted for 24.23,
8.61 and 6.68 per cent of the total asset, respectively. Relative to end-June 2022, the
proportion of the total assets held by DFIs increased by 1.44 percentage points, FCs
remained the same, while MFBs and PMBs decreased by 0.72 and 0.71 percentage
points, respectively.


JUN. 2020
DEC.2020
JUN. 2021
DEC. 2021
JUNE.2022
DEC.2022


N'Billion
Assets
Jun-22
Dec-22


N'Billion
Liabilities
Jun-22
DecFINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 2.5: Total Assets Structure of OFIs


2.2.1 Development Finance Institutions
At end-December 2022, the number of DFIs remained seven, with total assets of
N3,774.48 billion, representing an increase of 13.21 per cent, compared with end-June
2022. The increase was due largely to investments and placements, which grew by
28.22 per cent (N316.52 billion) and 15.81per cent (N73.74 billion), respectively. On the
liability side, borrowings and deposits grew by 19.75 per cent (N372.59 billion) and 7.47
per cent (N41.73 billion), respectively. The Bank of Industry (BOI), Development Bank
of Nigeria (DBN) and Federal Mortgage Bank of Nigeria (FMBN) accounted for 63.22,
13.69 and 13.01 percent of the total assets, respectively.

The shareholders’ funds increased by 3.00 per cent to N485.80 billion at end-December 2022, compared with the preceding period, due to accretion to reserves. while
capital adequacy ratio (CAR) increased marginally to 15.66 per cent at end-December 2022 from 15.18 per cent at end-June 2022.

The Liquidity Ratio (LR) was 202.23 per cent at end-December 2022, which was above
the regulatory minimum of 20 per cent, and 28.6 percentage points above the LR of
173.63 per cent at end-June 2022. In addition, the non-performing loans ratio increased by 1.88 percentage points from 24.04 per cent at end-June 2022 to 25.92 per
cent.


DFI:
59.04%
PMB:
9.32%
FC: 6.68%
MFB:
24.95%
End-Jun. 2022
DFI
PMB
FC
MFB
DFI:
60.48%
PMB:
8.61%
FC: 6.68%
MFB: 24.23%
End- Dec. 2022
DFI
PMB
FC
MFB
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 2.6 Consolidated Balance Sheet of DFIs


Figure 2.7 Total Assets of DFIs


Cash &
Bank
Balances
0.66%
Placement
s
13.99%
Investment
33.64%
Net Loans &
Advances
47.95%
Other
Assets
1.82%
Fixed
Assets
1.95%
End- Jun. 2022
Cash &
Bank
Balances
1.20%
Placements
14.31%
Investmen
t
38.10%
Net Loans &
Advances
42.76%
Other
Assets
1.59%
Fixed
Assets
2.03%
End- Dec. 2022


N'Bn
Assets
Jun-22
Dec-22


N'Bn
Liabilities
Jun-22
Dec-2
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 2.8 Total Liabilities of DFIs


2.2.2 Primary Mortgage Banks
The total assets of the Primary Mortgage Banks (PMBs) increased by 2.00 per cent to
N537.07 billion, at end-December 2022. The increase was due mainly to net loans and
advances which grew by 3.5 per cent (N10.08 billion). On the liability side, deposits
and other liabilities grew by 4.44 per cent (N7.73 billion) and 3.31 per cent (N6.74
billion), respectively. Investible funds available to the PMBs at end-December 2022
amounted to N23.09 billion, sourced mainly from increases in deposits and other liabilities and utilised to create loans & advances and placements.

The shareholders’ funds decreased by 14.63 per cent to N35.20 billion, while Capital
Adequacy Ratio (CAR) decreased to 10.40 per cent at end-December 2022 owing
to operational losses.

The Liquidity Ratio (LR) was 43.13 per cent at end-December 2022, which was above
the regulatory minimum of 20 per cent, and 6.21percentage points below the LR of
49.34 per dent at end-June 2022. In addition, the non-performing loans ratio reduced
by 5.21 percentage points from 27.28 per cent at end-June 2022 to 22.07 per cent
following intensive recovery drive.


Paid-up
Capital
7.16%
Reserves
6.99%
Deposits
16.75%
Borrowings
56.58%
Due to
Banks
0.09%
Other
Liabilities
11.13%
Longterm
Liabilities
1.30%
End- Jun. 2022
Paid-up
Capital
6.33%
Reserves
6.54%
Deposits
15.90%
Borrowings
59.86%
Due to
Banks
0.04%
Other
Liabilities
9.87%
Long-term
Liabilities
1.46%
End- Dec. 2022
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 2.9 Consolidated Balance Sheet of PMBs (N'BN)


Figure 2.10 Composition of Assets of PMBs


Figure 2.11 Composition of Liabilities of PMBS

NB'n
Assets
-100
-50

NB'n
Liabilities
Cash &
ShortTerm ...
Investment
10.98%
Net Loans
&
Advances...
Other
Assets
10.56%
Fixed
Assets
3.78%
End- Jun. 2022
Cash &
Short-Term
Funds...
Investment
10.73%
Net Loans &
Advances
55.49%
Other
Assets
10.37%
Fixed
Assets
3.87%
End-Dec. 2022
Paid-up
Capital,
21.04%
Reserves, ...
Deposits,
33.09%
Due to
Banks,
4.01%
Long-term
Liabilities,
16.39%
Other
Liabilities,
38.69%
End- Jun. 2022
Paid-up
Capital,
20.90%
Reserves,
...
Deposits,
33.88%
Due to
Banks,
4.64%
Long-term
Liabilities,
15.74%
Other
Liabilities,
39.19%
End- Dec. 2022
FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 2.4: Financial Highlights of PMBs

End-Jun 2022
(N’ billion)
End-Dec 2022
(N’ billion)
Absolute
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


2.2.3 Finance Companies
The total assets of Finance Companies (FCs) increased by 10.45 per cent to N416.90
billion, at end-December 2022, attributable largely to increases in net loans and advances, and placements which grew by 12.44 percent (N22.61billion) and 34.02 per
cent (N12.6 billion), respectively. On the liability side, borrowings and other liabilities
grew by 6.40 per cent (N15.31 billion) and 34.95 per cent (N31.21 billion), respectively.
Investible funds available to the sub-sector at end-December 2022 amounted to
N50.03 billion, sourced mainly from increases in borrowings and other liabilities, which
were utilised mainly to create loans and advances, placements, and investments.

The shareholders’ funds, decreased by 18.27 per cent to N38.56 billion, while CAR decreased by 3.71 percentage point to 7.53 per cent at end-December 2022, owing to
operational losses.

The non-performing loans (NPLs) of the sub-sector increased to 19.96 per cent at endDecember 2022, which reflected an increase of 0.79 percentage points from NPL of
19.17 per cent at end-June 2022.


FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 2.5: Financial Position of FCs


End-June 2022
(N’ billion)
End-December

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

Total Assets

Cash in Vault

Balances with Banks

Net Loans and Advances

Investments

Placements

Fixed Assets

Borrowings

Other Liabilities

Shareholders’ Funds

Paid up capital

Reserves


Figure 2.12 Consolidated Balance Sheet of FCs

N'Bn
Assests
Jun-22
Dec-22

Liabilities
Jun-22
Dec-22
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 2.13 Composition of Assets of FCs


Figure 2.14 Composition of Liabilities of FCs


2.2.4 Microfinance Banks
The total assets of the MFBs increased by 7.35 per cent to N1,512.09 billion, at endDecember 2022. The increase was due to net loans & advances, placements and
other assets which grew by 7.93 percent (N75.78 billion), 10 percent (N12.76 billion)
and 13.74 per cent (N9.17 billion), respectively. On the liability side, deposits and longterm borrowings grew by 11.82 per cent (N53.64 billion) and 55.0 per cent (N214.68
billion), respectively. Investible funds amounted to N308.54 billion, sourced mainly from
accretion to reserves, increases in deposits and long-term loans, which were utilised
mainly to create loans & advances and placements.
Cash & Bank
Balances
7.92%
Placement
s
9.81%
Investment
3.38%
Net Loans
&
Advances
48.16%
Other
Assets
17.54%
Fixed
Assets
13.19%
End- Jun. 2022
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
Paid-up
Capital,
7.79%
Reserves
, 4.71%
Borrowing
s 63.33%
Long-term
Liabilities,
0.51%
Other
Liabilities,
23.66%
End- Jun. 2022
Paid-up
Capital,
6.36%
Reserves,
2.89%
Borrowing
s 61.01%
Long-term
Liabilities,
0.83%
Other
Liabilities,
28.91%
End- Dec. 2022
FINANCIAL STABILITY REPORT – DECEMBER 2022

The shareholders’ funds increased by 4.87 per cent to N182.30 billion, while capital
adequacy ratio (CAR) decreased by 0.54 percentage points to 14.97 per cent at
end-December 2022.

The Liquidity Ratio (LR) was 70.92 per cent at end-December 2022, which was above
the regulatory minimum of 20 per cent, but 4.79 percentage points below the LR of
75.71 per cent at end-June 2022. Also, the non-performing loans ratio increased by
2.57 percentage points from 8.68 per cent at end-June 2022 to 11.25 per cent.

Table 2.6: Highlights of Financial Position of MFBs


End-June

(N’ Billion)
End-December 2022
(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


Figure 2.15 Balance Sheet of MFBs

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

Liabilities
Jun-22
Dec-22
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 2.16 Composition of Assets of MFBs

Figure 2.17 Composition of Liabilities of MFBs


Maturity Structure of Loans and Advances and Deposit Liabilities
Credits with tenors above 360 days continued to dominate the MFBs loans, accounting for 58.94 per cent of the total loans and advances, representing 0.04 percentage
point increase, compared with the position at end-June 2022. Short-term credits accounted for 41.06 per cent, a decrease of 0.04 percentage points, compared with
the position in the preceding period.

The deposit structure remained largely short-term, as deposits of less than one year
maturity accounted for 80.84 per cent, while deposits of over one year maturity accounted for 19.16 per cent. The maturity mismatch between deposits and credits was
mitigated by high liquidity position.

Cash & Bank
Balances
13.06%
Placements
9.06%
Investment
2.80%
Net Loans &
Advances
67.82%
Other
Assets
4.74%
Fixed
Assets
2.52%
End- Jun. 2022
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
Paid-up
Capital,
8.47%
Reserves,
3.87%
Deposits,
32.23%
Takings
from
Other
Banks,
9.51%
Long-term
Liabilities,
27.71%
Other
Liabilities,
18.21%
End- Jun. 2022
Paid-up
Capital,
7.76%
Reserves,
4.30%
Deposits,
33.57%
Takings
from
Other
Banks, ...
Long-term
Liabilities,
40.01%
Other
Liabilities,
11.95%
End- Dec. 2022
FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 2.7: Maturity Structure of MFBs Loans and Advances and Deposit Liabilities
Jun-22
Dec-22
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
Global financial markets were impacted by the persistent headwinds of interest rates
hikes, energy price shocks, supply-side constraints, and impact of the Russia-Ukraine
conflict. Despite the pass-through effects of the headwinds in the global economy,
the domestic financial market remained resilient owing to the Bank’s commitment
and efforts to ensure price stability.

2.3.1 Money Market
2.3.1.1 Interbank Market Rates
Interbank rates trended higher in the second half of 2022, compared with the position
during the first half, but remained within the MPR corridor of +100/-700 basis points.
Factors that affected the market included net fiscal outflows, cash reserve requirement (CRR) operations, settlements for foreign exchange interventions and open market operations (OMO).

On July 1, 2022, the open-buy-back (OBB) weighted daily average rate opened at
13.54 per cent, compared with 5.50 per cent on January 4, 2022. The rate, thereafter,
peaked at 17.01 per cent on November 22 and moderated to 10.74 per cent on December 30, 2022. During the review period, the daily OBB rate ranged between 7.08
and 17.01 per cent, compared with 0.57 and 15.29 per cent in the first half of 2022.

The unsecured inter-bank call weighted daily average rate opened at 13.00 per cent
on July 8, 2022, same as it opened on January 11, 2022, and peaked at 16.75 per cent
on December 23, 2022. The rates ranged between 9.50 and 16.75 per cent in the review period, compared with 4.50 and 16.00 per cent, in the first half of 2022.

The monthly average OBB and inter-bank call rates closed at 11.61 and 12.08 per cent
at end-December 2022, compared with 10.89 and 11.10 per cent at end-June 2022,
respectively.

FINANCIAL STABILITY REPORT – DECEMBER 2022

Volatility in OBB and Interbank interest rates slowed to 2.82 and 2.74 points in the review period, from 4.40 and 4.39 points, respectively, in the first half of 2022. This reflected increased stability arising from improved confidence and liquidity condition in
the market despite the tight monetary policy stance in 2022.

Figure 2.18: Volatility in Open-Buy-Back Interest Rates


Figure 2.19 Volatility in Interbank Interest Rates


4-Jan-22
4-Feb-22 4-Mar-22 4-Apr-22 4-May-22 4-Jun-22
4-Jul-22
4-Aug-22 4-Sep-22 4-Oct-22 4-Nov-22 4-Dec-22

4-Jan-22
4-Feb-22 4-Mar-22 4-Apr-22 4-May-22 4-Jun-22
4-Jul-22
4-Aug-22 4-Sep-22 4-Oct-22 4-Nov-22 4-Dec-22
1st Half of 2022
Interbank= 4.39
2nd Half of 2022
Interbank= 2.74
1st Half of 2022
OBB=4.40
2nd Half of 2022
OBB=2.82
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 2.20 Money Market Rates


2.3.1.2 Deposit and Lending Rates
The contractionary monetary policy stance, aimed at controlling banking system liquidity and the persisting uptick in inflation, resulted in higher deposit and lending
rates in the review period. The weighted average term deposit rate rose by 2.76 percentage points to 6.22, from 3.46 per cent in the preceding half-year.

Similarly, weighted average prime and maximum lending rates increased to 12.77 and
28.26 per cent respectively, in the second half of 2022 from 11.90 and 27.96 per cent
in the preceding half-year, as banks repriced their lending rates in line with the policy
rate hikes. The spread between the weighted average maximum lending and term
deposit rates narrowed by 2.46 percentage points to 22.04 per cent in the review period.

Figure 2.21 Interest Rates Spread


2.3.1.3 Nigerian Treasury Bills
Nigerian Treasury Bills (NTBs) for 91-, 182- and 364-day tenors were issued and allotted
in the second half of 2022 were N2,260.28 billion apiece, a decrease of 6.43 per cent,
compared with the level in the preceding half. The bid-cover ratio in the second half
of 2022 was 1.97 compared with 1.93 in the preceding half of same year. Average
stop rates for the second half of 2022 were 5.08, 6.52 and 10.67 per cent for the 91-,

Per cent
Inter-Bank Call
Open Buy Back
MPR
SLF
SDF

Jan'22
Feb'22
Mar'22
Apr'22
May'22
June'22
July'22
Aug'22
Sept'22
Oct'22
Nov'22
Dec'22
Per cent
Max Lending minus Weighted Average Saving & Time/Term Deposits rate
Max Lending minus Weighted Average Deposits rate(Demand, Saving, Time/Term)
FINANCIAL STABILITY REPORT – DECEMBER 2022

182- and the 364-day tenors, respectively, compared with 2.15, 3.35 and 5.15 per cent
in the first half.

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

Figure 2.23 Primary Market: NTBs Transactions for 2022


The NTBs outstanding was N4,422.72 billion at end-December 2022, compared with
N4,504.80 billion at end-June 2022.


per cent
N'Billion
Issues
Subscription
Maturities
Ave. Rates %
N1,143.4
3bn;
50.59%
N83.91bn
; 3.71%
N644.30b
n; 28.51%
N57.61bn
; 2.55%
N331.04b
n; 14.65%
December 2022
DMBs
MBs
Mandate Customers
Internal customers
CBN Take-up
DMBs;
N1782.22b
n; 73.78%
MBs; N
68.87
bn;
2.85%
Mandate
Customers;
N510.27bn
; 21.12%
Internal Customers ...
June 2022
DMBs
MBs
Mandate Customers
Internal Customers
FINANCIAL STABILITY REPORT – DECEMBER 2022

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


2.3.2 Foreign Exchange Market
The total foreign exchange sales by the Bank in the second half of 2022 amounted to
US$8.19 billion, compared with US$9.23 billion in the first half of 2022, a decrease of
12.64 per cent.

Figure 2.25 Sales at the Interbank Foreign Exchange Market
*Secondary Market Intervention Sales (SMIS). Small and Medium Enterprise (SME).
The Bank purchased US$0.84 billion, resulting in net sales of US$7.35 billion, compared
with purchases of US$1.33 billion and net sales of US$7.90 billion in the first half of 2022.
Forward contracts valued US$5.61 billion matured, while US$2.53 billion was outstanding at end-December 2022. Matured forward contracts amounted to US$7.01 billion,
while US$3.85 billion was outstanding in the first half of 2022.

Jun-22
Banks
Merchants Banks
Parastatals
CBN

Dec-22
Banks
Merchants Banks
Parastatals
CBN

SMIS/Special
Spot
Invisibles
SME
I&E
SMIS/ Special
Forwards
US$ Million
End-June 2022
End-December 2022
FINANCIAL STABILITY REPORT – DECEMBER 2022

2.3.2.1 Investors’ & Exporters’ Window
The foreign exchange rate at the I&E window opened at N420.00/US$ on July 1, 2022
and closed at N460.00/US$ on December 30, 2022, a depreciation of 8.70 per cent,
compared with the marginal appreciation of 0.72 per cent in the first half of 2022. The
rate opened at N417.00/US$ on January 4, 2022 and closed at N414.00/US$ on June
30, 2022.

The exchange rate depreciation in the second half of the year followed the rate adjustments in the interventions of the Bank at the SMIS retail segment of the market.

Figure 2.26 Monthly Average Rates at the I&E Window


2.3.2.2 Over-the-Counter Foreign Exchange Futures
The notional amount of over-the-counter (OTC) FX Futures contracts executed and
outstanding increased to US$2.61 billion and US$4.65 billion from US$1.44 billion and
US$3.77 billion at end-June 2022, respectively while the matured contracts decreased
to US$2.38 billion from US$3.00 billion.

2.3.2.3 Naira/Yuan Bilateral Currency Swap Agreement
A total of CNY1.44 billion was sold in the second half of 2022, bringing the total sales
to CNY8.45 billion, from inception in 2018.

2.3.3 Capital Market
Developments in the capital market provided an efficient and effective window for
investments and the mobilization of funds by both the government and corporate
institutions during the period. This enabled financial institutions to continue to play their
intermediation role and grow assets and liabilities.

2.3.3.1 New Issues of Securities
In the second half of 2022, there were eight new issues valued at N277.73 billion, comprising an Initial Public Offering (IPO) of N10 billion and seven corporate bonds
(N267.73 billion), compared with 18 issues that comprised three equities (N16.21 billion)
and 15 corporate bonds (N483.35 billion) in the first half of 2022. Furthermore, there

Jan-22
Feb-22 Mar-22 Apr-22 May-22 Jun-22
Jul-22
Aug-22 Sep-22 Oct-22 Nov-22 Dec-22
(N/US$)
FINANCIAL STABILITY REPORT – DECEMBER 2022

were 18 FGN bonds issued in the second half of 2022, compared with 15 issued in the
first half of 2022, reflecting an increase of 20 per cent.

Table 2.8: New Issues
Type
Number of Issues
Value of Issues (N’Bn)
EndJune

End-Dec

Change
%
EndJune

End-Dec

Change
%
IPO
-

-
10.00

Public Offer/Offer for
Sale
-
-

-
0.00

Private Placements


Rights


Total Equities


Corporate Bonds


Sub-national Bonds
-
-

-
-

FGN Bonds


Eurobond (415.58/$)

-100.00
519.48
-100.00
Total Debt


Total (Equities & Debt)


Source: SEC, DMO

2.3.3.2 Equities Market
Activities in the equities market remained bearish in the second half of 2022 as the
Nigerian Exchange Group All-Share Index (NGX ASI) and Market Capitalisation (MC)
trended downward.

The NGX ASI was 51,251.06 index points at end-December 2022, indicating a decrease
of 1.09 per cent below the level at end-June 2022. However, the equity market capitalisation increased marginally during the period by 0.11 per cent to N27.97 trillion at
end-December 2022 while government and corporate debt market capitalisation increased by 3.14 per cent and 43.24 per cent to N22.01 trillion and N1.06 trillion, respectively, at end-December 2022.

Table 2.9: NGX ASI, Equity and Debt Market Capitalisation
Markets (N’Bn)
End-Dec 2021
End-Jun 2022
End-Dec 2022
Change
(%)
NGX ASI

Equity Market Cap

Government Debt Market
Cap

Corporate Debt Market Cap

Source: NGX Reports


FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 2.10: Nigerian Exchange Limited Indices
Description
End-Jun

End-Dec

End-Jun

End-Dec

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

NGX Oil/Gas Index

NGX Lotus Islamic Index

NGX Industrial Index

NGX Growth Index

NGX Sovereign Bond Index

Source: NGX Reports

The total volume, value, and number of deals on the NGX Exchange declined by
68.04, 59.84 and 26.86 per cent, respectively, in the second half of 2022.

Table 2.11: NGX Deals, Volume and Value
Deals (000)
Volume (M)
Value (M)
EndJun

EndDec

Change
(%)

End-Jun

End-Dec

Change
(%)

End-Jun

End-Dec

Change
(%)

Government
BondsFederal

State & Local
-
-


Corporate
Bonds/Debentures


Equities

Exchange
Traded
Products
(ETPs)

Total

Source: NGX

FINANCIAL STABILITY REPORT – DECEMBER 2022

2.3.3.3 Foreign and Domestic Portfolio Investment
Foreign Portfolio Investment (FPI) inflows totaled N75.25 billion, while outflows stood at
N60.50 billion, reflecting a net inflow of N14.75 billion in the second half of 2022. In the
first half of 2022, inflows amounted to N95.88 billion, while outflows stood at N105.41
billion, reflecting a net outflow of N9.53 billion.

Foreign portfolio transactions accounted for 20.50 per cent of total equity transactions
in the review period, compared with 13.37 per cent in the preceding half year. Domestic transactions accounted for the balance of 79.50 per cent, compared with
86.63 per cent in the preceding period.

Table 2.12: Foreign and Domestic Portfolio Participation in Equities Trading
Period
End-Dec

End-June

End-Dec

Change
(a)
(b)
(c)
%


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

Foreign Portfolio Transactions (N'Billion)

Foreign %

Domestic Transactions (N'Billion)

Domestic %

Foreign Inflow (N'Billion)

Foreign Outflow (N'Billion)

NSE ASI

Market Capitalization


2.3.3.4 National Association of Securities Dealers
The NASD Securities Index fell to 709.66 points at end-December 2022, from 763.24
points at end-June 2022. Similarly, the NASD over-the-counter (OTC) transactions declined by 7.19 per cent to N932.51 billion at end-December 2022.

Table 2.13: Transactions on the NASD OTC Market
OTC Market
End-De 2021
End-Jun 2022
End-Dec 2022
% Change
Unlisted Index (Points)

Market Cap (N’Bn)

Deals

Volume ('000)

Value (N'000)

Source: NASD

2.3.3.5 Commodities Market
Trading activities on the commodities exchanges were low as transactions were executed on three out of the five exchanges in the review period. There were no trading
FINANCIAL STABILITY REPORT – DECEMBER 2022

activities on Prime Commodity Exchange Limited (PCX) and Nigeria Commodity Exchange (NCX). Meanwhile, the Bank sustained its efforts in repositioning the NCX to
a world-class commodity exchange.

2.3.3.6 AFEX Commodities Exchange
The volume and value of transactions on the AFEX Commodities Exchange declined
by 46.14 and 54.25 per cent to 142 million kg and N47.46 billion, respectively, compared with end-June 2022 position.

Table 2.14: Transactions on AFEX (N’M)
H1 2022
H2

H1

H2

H1 2022
H2 2022


Total No of Deals

Total Volume
Million/KG

Total Value ₦ (‘M)
%
change
Cashew
Nut

Cocoa

Ginger

Maize

Paddy
Rice

Sesame

Sorghum

Soyabean

Total


2.3.3.7 Gezawa Commodity Market and Exchange
Gezawa Commodity Market and Exchange Limited (GCMX) traded a total of 3,600
metric tonnes of maize and soybeans valued ₦3.77 billion in the review period.

Table 2.15: Gezawa Commodity Market and Exchange (GCMX) Transactions
Product
Maize
Soybeans
Grand
Total
(N’m)
Total Volume (Kg)
End-Dec 2021

End-Jun 2022

End-Dec 2022


2.3.3.8 Lagos Commodities and Futures Exchange
The Lagos Commodities and Futures Exchange launched gold trading on its platform,
marking the official commencement of gold trading on an exchange in Nigeria. Although, trade commenced in the first half of 2021, there were no trading activities in
the first half of 2022. Meanwhile, the Exchange traded a total volume of 956g of Eko
Gold Coin valued N43,041,013.30 in the second half of the year.

FINANCIAL STABILITY REPORT – DECEMBER 2022

2.3.3.9 The Domestic Debt Market
Total domestic debt outstanding increased by 9.85 per cent to N24.05 trillion at endDecember 2022. The increase is mainly attributed to new issues of Corporate, FGN
Savings and Corporate Green Bonds.

2.3.3.10 Bonds – Primary Market
Total bonds outstanding at end-December 2022 stood at N19.58 trillion, reflecting an
increase of 12.90 per cent, compared with N17.35 trillion at end-June 2022.

2.3.3.11 FGN Bonds
New issues and re-openings of FGN bonds increased by 20.00 per cent to N1,350.00
billion during the review period, compared with the preceding period. Public subscription and sales decreased to N1,631.21 billion and N1,195.18 billion, respectively, in the
second half of 2022, compared with N2,852.56 billion and N1,805.45 billion in the first
half of 2022.

During the review period, the yield curve was normal as the upward shift in the yields
on government bonds signalled investors’ expectation of higher interest rates, reflecting the contractionary monetary policy stance to rein-in inflation.

Figure 2.27 Yield Curve

Source: FMDQ-OTC Plc

2.3.3.12 FGN Savings Bonds
FGN Savings Bonds increased by 22.39 per cent to ₦27.51 billion, owing to new issues.
The average coupon rates at 7.9515 and 8.9515 per cent for the 2- and 3-year tenors,
were lower than the 10.7713 and 11.7713 per cent, recorded in the preceding half
year, respectively.

FINANCIAL STABILITY REPORT – DECEMBER 2022

2.3.3.13 FGN Green Bonds
The outstanding stock of the bonds decreased by 41.61 per cent to ₦15.00 billion at
end-December 2022, with the redemption of matured issues.

2.3.3.14 FGN Sukuk Bond
The total value of FGN Sukuk increased by 21.22 per cent to ₦742.56 billion at endDecember 2022, owing to the issuance of a 10-year FGN Sukuk worth ₦130.00 billion,
with a rental rate of 15.64 per cent payable semi-annually.

2.3.3.15 Sub-National Bonds
The total value of the bonds decreased by 43.90 per cent to N114.30 billion at endDecember 2022, owing largely to the maturity of 10 sub-national bonds, amounting
to N49.86 billion, and the redemption of N9.58 billion by four State Governments.

2.3.3.16 Corporate Bonds
Corporate bonds worth N1,403.72 billion were outstanding at end-December 2022 as
bonds valued N96.04 billion were redeemed and those worth N18.98 billion matured,
while bonds valued N803.97 billion were issued in the review period.

Table 2.16: Outstanding Debt Instruments (N’ billion)
Instruments
End-Jun

End-Dec

%
Change
Proportion of
Total (June
2022)
Proportion of
Total (Dec
2022)
FGN Bonds

Nig. Treasury Bills

FGN Savings Bonds

FGN Sukuk

FGN Green Bond

Nig. Treasury Bonds

FGN Promissory Notes

Sub-National Bonds

Green Corporate
Bonds

Sukuk- Sub-National

Green-Corporate Bond 23.50

TOTAL
21,851.88
24,005.15
9.85

2.3.3.17 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%, respectively. The market capitalisation increased by 8.26 per cent to N29.89 trillion in the second half of 2022.


FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 2.17: FMDQ Market Size
S/N
SECTOR
End-Dec 2021
End-Jun

End-Dec

Change
(₦'bn)
(₦'bn)
(₦'bn)
(%)
1 FGN Bonds

2 Agency Bonds

-
3 State/Municipal
Bonds

4 Corporate Bonds

5 Supranational
Bonds

6 Sukuk

7 Green Bonds

8 Eurobonds

9 Short-Term Bonds

10 Treasury Bills

11 OMO Bills
2,051.79

- 40.74
12 Commercial Papers


Total Market Size


2.3.3.18 Mutual Funds

The Net Asset Value (NAV) of registered funds stood at N1.52 trillion at end-December
2022, indicating an increase of 1.77 per cent over the preceding period. The increase
was attributed to 20.83, 18.4, 17.62 and 4.73 per cent growth in Shariah Compliant
Funds, Dollar Funds, Money Market Funds and Infrastructure Funds, respectively.

Table 2.18: Collective Investment Schemes (₦’Billion)
Bond/Fixed Income Funds
End-Dec

End-Jun

End-Dec 2022
Change
(%)
Change
(%)
(a)
(b)
(c)
(a&b)
(b&c)
Ethical Funds

Shariah Compliant Funds

Dollar Fund

Bond/Fixed Income Funds

Equity Based Funds

Real Estate Funds

Money Market Funds

Balanced Based Funds

Exchange Traded Funds


Infrastructure Funds

Total


2.3.3.19 Other Developments
During the review period, the Securities and Exchange Commission (SEC) launched
the amended 2021-2025 Revised Capital Market Master Plan (RCMMP), to provide
strategic direction on regulatory and developmental activities in the capital market.
FINANCIAL STABILITY REPORT – DECEMBER 2022

SEC also commenced the implementation of 100 per cent custody requirement on all
Collective Investment Schemes (CIS) to further protect investors and boost confidence in the market.

The100 per cent custody requirement on these funds reduces the potential for a systemic risk event crystallizing in that segment of the market, as it separates management from custody of the funds, and ensures that failure of a fund manager would
have little or no effect on the fund. It is envisaged that this initiative would contribute
significantly to financial system stability.

2.4
Real Sector Interventions
The Bank sustained its interventions in priority sectors of the economy, to foster sustainable economic development, inclusive growth and positively impact price and financial stability. These sectors include agriculture, manufacturing/industry, micro, small
and medium enterprises, energy/infrastructure, health, and export. See Appendix 3.
The Bank enhanced its loan recovery drive and repayments increased significantly by
153.48 per cent in the second half of 2022. Furthermore, disbursements reduced by
39.42 per cent, reflecting the Bank’s current strategic objectives.

2.4.1 Agricultural Policy Support
2.4.1.1 Agricultural Credit Guarantee Scheme
A total of 30,560 loans valued ₦5.25 billion were guaranteed under the Scheme in the
second half of 2022, compared with 13,194 loans, valued ₦3.22 billion in the preceding
period. Also, 15,286 guaranteed loans valued ₦3.14 billion were repaid during the period, compared with 11,773 guaranteed loans valued ₦2.14 billion at end-June 2022.

The guaranteed claims due for settlement to participating banks from the Bank rose
by 55.55 per cent to ₦2.80 million in the second half, compared with the level in the
first half of 2022.

2.4.1.2 Commercial Agriculture Credit Scheme
The sum of ₦0.99 billion was disbursed to two agro-enterprises in the second half of
2022, a decrease of 96.48 per cent, compared with ₦28.30 billion disbursed to 11 beneficiaries, in the first half while repayments rose by 40.14 per cent to ₦46.05 billion in
the review period.

2.4.1.3 Anchor Borrowers’ Programme
In the second half of 2022, the sum of ₦103.73 billion was disbursed to 245,361 smallholder farmers across the country to produce rice, maize and wheat; compared with
₦35.52 billion disbursed to 28,876 smallholder farmers in the first half of 2022. This reflected an increase of 192.03 per cent in the value of projects funded over the preceding period. Furthermore, a total of 529,478 hectares of land were cultivated in the
second half of 2022, compared with 128,579 hectares in the preceding half of 2022,
indicating an increase of 311.79 per cent, while repayments rose by 47.41 per cent to
₦63.37 billion in the review period.
FINANCIAL STABILITY REPORT – DECEMBER 2022

2.4.1.4 Accelerated Agriculture Development Scheme
Disbursement decreased by 88.00 per cent to ₦0.18 billion in the second half of 2022
and repayment also decreased by 62.47 per cent to ₦1.64 billion.

2.4.1.5 Paddy Aggregation Scheme
The sum of ₦1.00 billion was repaid in the second half of 2022; however there was no
disbursement in the review period.

2.4.1.6 National Food Security Programme
The sum of ₦4.38 billion was repaid at end-December 2022, compared with ₦2.03 billion at end-June 2022. There were no disbursements during the review period.

2.4.2 Micro, Small and Medium Enterprises & Industrial Policy Support
2.4.2.1 Micro, Small and Medium Enterprises Development Fund
The sum of ₦0.01 billion was disbursed to 130 beneficiaries, while repayments rose by
101.59 per cent to ₦5.08 billion at end-December 2022.

2.4.2.2 Agribusiness/Small and Medium Enterprises Investment Scheme
The sum of ₦1.33 billion was disbursed for 592 projects during the second half of 2022,
compared with ₦1.60 billion for 1,071 projects during the first half of 2022. This Indicated
decreases of 16.86 and 44.72 per cent in value and volume of projects respectively.
Repayments decreased by 73.68 per cent to ₦0.20 billion at end-December 2022.

2.4.2.3 Creative Industry Financing Initiative
The sum of ₦0.17 billion was disbursed, while ₦0.30 billion was repaid during the review
period.

2.4.2.4 Targeted Credit Facility
During the period under review, the sum of ₦1.21 billion was disbursed to 2,797 beneficiaries, compared with ₦24.37 billion disbursed to 50,302 beneficiaries during the first
half of 2022. The sum of ₦0.82 billion was repaid during the review period.

2.4.2.5 Tertiary Institutions Entrepreneurship Scheme
In the review period, the sum of ₦0.06 billion was disbursed to 20 beneficiaries, compared with N0.26 billion to 53 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 ₦89.55 billion was disbursed to 16 projects in the second half of 2022, compared with ₦202.15 billion to 34 projects in the first half. The sum of ₦11.31 billion was
repaid during the review period.

FINANCIAL STABILITY REPORT – DECEMBER 2022

2.4.3.2 COVID-19 Intervention for the Manufacturing Sector
In the review period, the sum of ₦112.91 billion was disbursed for 29 projects, compared with ₦421.67 billion for 50 projects in the first half of the year. The sum of ₦3.52
billion was repaid during the period.

2.4.3.3 Healthcare Sector Intervention Facility
The sum of ₦16.02 billion was disbursed for eight projects in the second half of 2022,
compared with ₦17.20 billion for 11 projects in the first half. The sum of ₦2.12 billion
was repaid in the period under review. There was no repayment recorded in the preceding period, as most of the facilities were still under moratorium.

2.4.3.4 Textile Sector Intervention Facility
In the second half of 2022, ₦1.50 billion was disbursed, while there was no disbursement in the preceding period. The sum of ₦4.49 billion was repaid, compared with
₦8.62 billion repaid in the first half of 2022.

2.4.3.5 CBN-BOI Industrial Facility
In the second half of 2022, ₦50.00 billion was released under the intervention to BOI,
similar to the ₦50.00 billion disbursed in the first half of the year.

2.4.3.6 Presidential Fertilizer Initiative
There were no disbursements under this Initiative in 2022. However, the sum repaid in
the second half of 2022 increased by 33.33 per cent to ₦4.00 billion, compared with
₦3.00 billion repaid in the first half of 2022.

2.4.3.7 Intervention Facility for the National Gas Expansion Programme
The sum of ₦9.30 billion was disbursed for two projects, compared with ₦26.00 billion
disbursed for four projects in the first half of 2022, reflecting a 64.23 per cent decrease.
No repayments were made in 2022 as the facilities were still under moratorium.

2.4.3.8 Shared Agent Network Expansion Facility
There were no disbursements under this initiative in 2022. However, the sum of ₦0.60
billion was repaid in the second half of 2022, compared with ₦0.31 billion in the first
half of 2022, indicating an increase of 93.54 per cent.

2.5
Export Policy Support
2.5.1 Non-oil Export Stimulation Facility
There were no disbursements under the initiative in 2022. The sum of ₦7.92 billion was
repaid, reflecting an increase of 294.02 per cent over the outcome in the preceding
period.

2.5.2 Export Facilitation Initiative
The sum of ₦10.18 billion was released for three projects in the review period, compared with ₦36.00 billion disbursed to five projects in the first half of 2022. There were
no repayments as the facilities were still under moratorium.
FINANCIAL STABILITY REPORT – DECEMBER 2022

2.6
Energy Policy Support
2.6.1 Power and Airline Intervention Fund
There were no disbursements under this initiative in 2022. The sum of ₦10.47 billion was
repaid in the review period, reflecting a-34.19 per cent decrease from the preceding
period’s outcome.

2.6.2 Nigerian Electricity Market Stabilisation Facility
The sum of ₦71.48 billion was disbursed, compared with ₦34.17 billion in the first half of
the year, while ₦11.51 billion was repaid indicating an increase of 5.5 per cent over
the outcome in the preceding period.

2.6.3 Nigeria Bulk Electricity Trading – Payment Assurance Facility
There was no disbursement, compared with the sum of ₦26.93 billion disbursed in the
first half of 2022; while repayments increased by 202.65 per cent to ₦977.16 billion.

2.6.4 National Mass Metering Programme
The sum of ₦3.11 billion was disbursed in the second half of 2022, compared with ₦0.19
billion in the first half of 2022, while the sum of ₦0.36 billion was repaid. There were no
repayments in the first half of 2022 as the facilities were still under moratorium.

2.7
Institutional Support and Financial Inclusion
2.7.1 National Collateral Registry
The performance indicators of the National Collateral Registry (NCR) trended upwards, indicating increased lending against movable assets offered as collateral.
The number and values of financing statements registered increased by 9.25, 363.66
and 157.89 per cent to 40,909, ₦1,025.61 billion and US$0.05 billion, respectively, compared with that of the preceding period. The financing statements were registered by
45 financial institutions in respect of 42,695 borrowers. In addition, searches conducted
increased by 23.47 per cent to 79,008.

Table 2.19: Transactions on the National Collateral Registry Portal
Debtor Type
Number of Financing Statements
Number of Borrowers
Currency
Value of Financing Statements
(N‘ Billion)

End-Jun

EndDec

EndJun

EndDec

End-Jun

End-Dec

Individual

NGN
114.62
829.15
Large Business

NGN
25.70
95.34
USD
0.004
0.046
EUR
0.00011
0.00
Medium
Business

NGN
61.99
73.74
USD
0.015
0.003
Micro Business

NGN
1.51
2.50
FINANCIAL STABILITY REPORT – DECEMBER 2022

USD
0.00
0.00
Small Business

NGN
17.39
24.88
Total

NGN
221.20
1,025.61
USD
0.019
0.049
EUR
0.00011
0.00

Furthermore, 21,038 of the financing statements registered in the review period were
in respect of 21,591 women and women-owned enterprises, representing 50.57 per
cent of the total number of borrowers.

Table 2.20: Women and Women-owned Enterprises Transactions on the National Collateral Registry Portal
Debtor Type
Number of Financing Statements
Number of
Women and
Women-owned
Enterprises
Currency
Value of Financing Statements
(N‘billion)

EndJun

EndDec

EndJun

EndDec

End-Jun

End-Dec

Individual

NGN
59.33
763.21
Large Business

NGN
0.216
1.19
USD
0.00
0.014
Medium
Business

NGN
3.50
2.78
Small Business

NGN
1.46
2.23
Micro Business

NGN
0.052
0.19
Total

NGN
64.55
769.60
USD
0.00
0.014

A total of 142 financial institutions had registered 288,943 financing statements valued
₦16,351.77 billion, US$2.48 billion, €0.11 billion, and £0.000027 billion from inception in
2016 to end-December 2022.

2.7.2 Financial Inclusion
The Bank sustained its initiatives towards improving financial inclusion, in collaboration
with deposit money banks and other financial service access points. Bank Verification
Number (BVN) enrollment increased by 1,555,293 in the second half of 2022, of which
996,179 were females, indicating an increase in the customer base of banks. Similarly,
224,328 agents were onboarded under the SANEF agent expansion scheme, bringing
the total to 1,474,173 and increasing access point per capita to 1,391 agents per
100,000 adults. Also, the number of active Point-of-Sale (PoS) terminals increased to
1,029,897.


FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 2.21: Financial Inclusion Statistics
Indicator
End-Jun 2022
End-Dec 2022
New BVN Registration
3,577,980
1,555,293
New BVN Registration (Female)
1,370,875
996,179
Total Agents
1,249,845
1,474,173
No. of Onboarded (New) Agents
247,331
224,328
Nos of Agents Per 100,000 Adults
1,179
1,391
Active PoS Terminals
871,591
1,029,897

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


FINANCIAL STABILITY REPORT – DECEMBER 2022

3.0
REGULATORY AND SUPERVISORY ACTIVITIES
3.1
Financial Soundness Indicators

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 declined to 4.21 per cent from 4.95 per cent, at end-June 2022, lower
than the 5.00 per cent benchmark. The improvement was mainly due to stricter credit
risk management practices and the continued implementation of the Global Standing Instruction (GSI) policy which enhanced loan recovery.

Figure 3.1 Banking Industry NPLs Ratio


Also, the capacity of banks capital to withstand losses on NPLs not fully provisioned
improved significantly during the review period, as the ratio of non-performing loans
net of provisions to capital, decreased to 1.59 per cent from 5.81 per cent at endJune 2022. This was occasioned by the decline in NPLs at end-December 2022, compared with end-June 2022 and increased specific provisioning 1for NPLs.

1Specific provisions are provisions against expected and identifiable losses on loans. Specific provisions for substandard, doubtful, very doubtful and lost amounts are 10, 50, 75 and 100 per cent, respectively in line with the prudential
guideline

End Dec. 2020
End Jun. 2021
End Dec. 2021
End Jun. 2022
End Dec. 2022
Per cent
FINANCIAL STABILITY REPORT – DECEMBER 2022

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 0.26 percentage point to
19.82 per cent during the review period, driven mainly by the significant increase in
total assets of the banking sector, which outweighed the marginal increase in core
liquid assets. The rise in total assets was due to the increases in banks’ investments in
corporate and other bonds, unquoted companies, other tangible assets, and property plants and equipment. Similarly, the ratio of core liquid assets to short-term liabilities declined by 0.93 percentage point to 28.67 per cent at end-December 2022, owing largely to significant increases in both liquid assets and deposit liabilities. The increase in liquid assets was attributed mainly to cash reserve requirements and treasury
bills, while the increase in deposit liabilities was as a result of the Bank’s currency redesign policy.

Figure 3.3 Banking Industry Liquidity Indicators (%)


3.1.1.3 Exposure of Banking System to Real Estate Subsector
The banks’ exposure to real estate (residential and commercial) declined marginally
in the review period. The ratio of residential real estate loans to total gross loans decreased by 0.03 percentage point to 0.18 per cent at end-December 2022, from 0.21
per cent at end-June 2022. Similarly, the ratio of commercial real estate loans to total

End Dec. 2020
End Jun. 2021
End Dec. 2021
End Jun. 2022
End Dec. 2022
Percentage(%)
Amount (N'Billion)
NPLs
Specific Provisions
NPLs net provisions to capital

End-Dec 2020
End-Jun 2021
End-Dec. 2021
End-Jun 2022
End-Dec 2022
Liquid assets (core) to total assets*
Liquid assets (core) to short-term liabilities*
FINANCIAL STABILITY REPORT – DECEMBER 2022

gross loans declined by 0.13 percentage point to 2.37 per cent at end-December
2022, compared with 2.50 per cent at end-June 2022.

Figure 3.4 Banking Industry Real Estate Indicators


3.1.1.4 Exposure of Banking System to Oil & Gas, Manufacturing and Services Sectors
The banks’ exposure to the Oil & Gas, Manufacturing and Services sectors increased
during the review period. The ratio of manufacturing loans to total gross loans increased by 1.97 percentage points to 18.73 per cent at end-December 2022, from
16.76 per cent at end-June 2022. However, the ratio of Services loans to total gross
loans declined by 1.00 percentage point to 37.13 per cent, compared with 38.13 per
cent at end-June 2022. Though the banking system’s exposure to Oil & Gas increased
marginally, it was outweighed by the significant increase in total gross loans; thus, the
ratio of oil & gas loans to total gross loans remained unchanged at the end of the
second half, compared with the position in the first half of the year.

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


End Dec. 2020
End Jun. 2021
End Dec. 2021
End Jun. 2022
End Dec. 2022
Residential real estate loans to total gross loans
Commercial real estate loans to total gross loans

End Dec. 2020
End Jun. 2021
End Dec. 2021
End Jun. 2022
End Dec. 2022
Percentage (%)
Oil & Gas to Gross Loans
Manufacturing to Gross Loans
Services to Gross Loans
FINANCIAL STABILITY REPORT – DECEMBER 2022

3.1.2 Capital-Based Indicators
The banking industry’s solvency, measured by regulatory capital to risk-weighted assets, declined to 13.76 per cent at end-December 2022, from 14.11 per cent at endJune 2022, owing largely to growth in risk assets. Similarly, the regulatory tier-1 capital
to risk-weighted assets decreased to 11.93 per cent, from 12.19 per cent at end-June
2022. The ratio, however, was above the minimum regulatory threshold of 7.5 per cent
for national and regional banks and 11.25 per cent for international and domestic
systemically important banks.

Figure 3.6 Banking Industry Capital Adequacy Indicators

*The ratios are computed based on IMF-FSI Manual

3.1.3 Income and Expense Based Indicators
The ratio of interest margin to gross income increased by 10.83 percentage points to
67.63 per cent during the review period. However, the ratio of non-interest expenses
to gross income declined by 3.66 percentage points to 72.20 per cent, while the ratio
of personnel expenses to non-interest expenses rose to 31.31 per cent at end-December 2022.

Table 3.1 Selected Financial Soundness Indicators of the Nigerian Banking Industry
Indicators

EndDec
EndJun
EndDec
EndJune
End
Dec
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


end-Dec-2020
end-Jun-2021
end-Dec-2021
end-Jun-2022
end-Dec-2022
Percentage(%)
Regulatory capital to risk-weighted assets
Regulatory Tier 1 capital to risk-weighted assets
FINANCIAL STABILITY REPORT – DECEMBER 2022

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

*FSIs are computed based on IMF-FSI Manual

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 banking
industry vulnerabilities and risks, with a view to implementing appropriate regulatory
measures.

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 13.76, 44.12 and
4.21 per cent respectively, while Return On Asset (ROA) and Return On Equity (ROE)
stood at 1.86 and 23.82 per cent, respectively.

Table 3.2 Banking Industry Baseline Selected Key Indicators

CAR
LR
NPLs
ROA
ROE
Dec 2021 (%)

Jun 2022 (%)

Dec 2022 (%)

Percentage Points
Change


Figure 3.7 Banking Industry CAR


Jun ' 18 Dec '18
Jun' 19
Dec' 19
Jun' 20
Dec' 20
Jun' 21
Dec'21
Jun'22
Dec'22
Per cent
FINANCIAL STABILITY REPORT – DECEMBER 2022

3.2.1.2 Credit Risk
The general credit risk stress test revealed that shocks of 15.00, 20.00, 30.00 and 50.00
per cent increases in NPLs would result in the banking industry CAR declining to 13.28,
13.12, 12.81 and 12.16 per cent, respectively, from the baseline of 13.76 per cent. Also,
a shock of 100.00 per cent increase in NPLs would lead to a decrease of banking
industry CAR to 10.51 per cent.

The stress test revealed that the banking industry could withstand shocks of up to
100.00 per cent increase in the industry’s NPLs, as the industry CAR would remain
above the regulatory requirement of 10.00 per cent.

Table 3.3 General Credit Default Stress Test

Similarly, a test of obligor credit concentration shocks of 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 13.43 and
12.09 per cent, respectively, from 13.76 per cent. In addition, a shock of five largest
corporate credit facilities shifting from doubtful to lost (scenario 3) would result in banking industry CAR declining to 10.36 per cent. The result of the tests showed resilience
to obligor credit concentration risk as the CAR would remain above the 10.00 per cent
regulatory threshold under scenarios 1, 2 and 3.

Table 3.4 Credit Concentration Risk
General Credit Shocks
June 2022 CAR (%)
December 2022 CAR (%)
Baseline
14.11
13.76
10% NPLs increase
13.80
13.44
15% NPLs increase
13.64
13.28
20% NPLs increase
13.49
13.12
30% NPLs increase
13.17
12.81
50% NPLs increase
12.53
12.16
100% NPLs increase
10.88
10.51

June 2022
CAR (%)
Dec 2022
CAR (%)
Baseline
14.11
13.76
Single Factor Credit Concentration Shocks
Scenario 1
Five largest corporate credit facilities shifted from performing loans
to sub-standard (10% provision)
13.63
13.43
Scenario 2
Five largest corporate credit facilities shifted from sub-standard to
doubtful (50% provision)
12.88
12.09
Scenario 3
Five largest corporate credit facilities shifted from doubtful to lost
(100% provision)
11.62
10.36
FINANCIAL STABILITY REPORT – DECEMBER 2022

3.2.1.3 Sectoral Credit Concentration Risk
A breakdown of banking industry total credit by sector at end-December 2022 is
shown below.

Figure 3.8 Sectoral Concentration of Credit


The results of sectoral credit concentration shocks showed that a 20.00 per cent default on total exposure to Oil & Gas could reduce CAR to 13.04 per cent, while a 50.00
per cent default could decrease CAR to 9.11 per cent. The sector concentration stress
test therefore, showed that the banking industry could withstand a shock of 20.00 per
cent to Oil and Gas exposures.

3.2.1.4 Interest Rate Risk
The stress test on the net position of interest-sensitive instruments showed that the industry could maintain a stable solvency position to interest rate shock of up to 1000
basis points downward shift in yield curve as the post-shock CAR of 12.12 per cent
remained above the regulatory threshold of 10.00 per cent.

The global economy witnessed policy normalisation by many monetary authorities in
the second half of 2022 as part of measures to rein in inflation, resulting in tightened
financial market conditions, with unintended consequences in some jurisdictions. In
particular, the Monetary Policy Committee (MPC) embarked on a contractionary
monetary policy stance to rein in inflation and stabilize exchange rate, effective April
2022. This development has impacted banks’ holding of fixed income securities and
could constitute significant risk to banks’ solvency and liquidity.

Analysis of the impact of a rise in interest rate on long tenored fixed income securities
based on IFRS 9 standards2 at end December 2022, showed that banks could withstand unrealised losses arising from the two classes of fixed income as the proportion

2 Fixed Income Fair value through Profit or Loss (FVTPL) and (fair Value through Other Comprehensive
Income (FVOCI) classifications

Oil and Gas
Manufacturing
Government
General
Gen Comm
Finance and Insurance
Others
FINANCIAL STABILITY REPORT – DECEMBER 2022

of these classes of bonds constituted only 4.73 per cent investable assets of banks at
December 2022.

Further analysis based on a severe scenario of the entire loss of the Mark-to-Market
losses, showed that the industry capital adequacy would only decline from 13.67 per
cent to 12.18 per cent, reflecting the adequacy of banking industry capital buffers
(Tier 1 & Tier 2).

Despite the contractionary monetary policy stance, banks had robust liquidity as their
liquidity ratio (LR) was 44.12 per cent at end-December 2022. Consequently, they
were not under pressure to resort to fire sale of their liquid financial assets.

The analysis showed that the increase in interest rates had a mixed impact on the
health and financial soundness indicators of banks. Thus, while rate hikes had a negative impact on the holdings of banks, particularly FGN bond FVTPL and FVTOCI, they
had a positive impact on banks through interest income and investment securities.
In view of the above, the solvency and liquidity of the industry is not currently threatened. However, the Bank will continue to strike a delicate balance between the pursuit of price stability and financial system stability. In this regard, while it might be expedient to raise interest rates to tame inflation, the Bank would act in consideration of
the impact of interest rate hikes on financial system stability.

Figure 3.9 Impact of Interest Rate Shocks on CAR


3.2.2 Liquidity Stress Test
The stress test results revealed that after a one-day run scenario, the LR of the industry
could decline from the 44.12 per cent baseline position to 29.56 per cent. Similarly,
under the 5- and 30-day scenarios, the LR for the industry could decline to 10.89 and
5.96 per cent, which could result in liquidity shortfalls of N5.21 trillion and N6.17 trillion,
respectively. However, the Bank had at its disposal significant CRR balances of N11.51
trillion to backstop banks’ liquidity.


13.76
12.84
11.93
Baseline CAR
500 bps downward shift in yield
curve
1000 bps downward shift in yield
curve
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 3.10 Industry Liquidity Stress Test


Table 3.5: Implied Cash Flow Liquidity Stress Test Results

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

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

32.73
Nil
29.56
148.83
Day 2


Day 3


Day 4


Day 5


Day 30


3.2.3 Maturity Mismatch
The industry baseline assets and liabilities maturity profile at end-December 2022, revealed that the shorter end of the market (≤90-day bucket) was adequately funded.
The cumulative position for the industry showed a mismatch of N3,272.51 billion assets
over liabilities.

The test result under Descriptive Maturity Mismatch (Test 2A) revealed that the banking
industry was adequately funded, except for the “above 3 years” bucket. Under Static
Rollover Risk Analysis (Test 2B) and Dynamic Rollover risk (Test 2C), the industry had
mismatches of N7,379.17 billion and N10,158.51 billion, respectively. Relative to endJune 2022 tests, these reflected increases of N1,739.67 billion and N2,325.02 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 30
days
Jun-21
Dec-21
Jun-22
Dec-22
FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 3.6 Maturity Profile of Assets and Liabilities at End-December 2022
Bucket
Liabilities
Assets
Mismatch
Cumulative Mismatch
N’ billion
≤30 days

31-90 days

91-180 days

181-365 days

1-3 years

>3 years

Total
50,548.98
53,944.72


Table 3.7 Stress Test Results for Maturity Mismatch at End-December 2022

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)
N’ billion
No of banks
with mismatch
N’ billion
No of banks
with mismatch
N’ billion
No of banks with
mismatch
≤30 days
19,451.79

12,154.93

58.33

31-90 days
7,036.52

(507.28)

(308.66)

91180days
4,309.15

(2,263.78)

(1,003.96)

181365days
2,352.45

(4,258.99)

(1,674.58)

1-3 Years
2,457.84

(4,387.26)

(1,131.91)

Above

years
(1,935.97)

(8,116.80)

(6,097.73)

Total
33,671.77
(7,379.17)
(10,158.51)

3.2.4 Contagion Risk Analysis
The contagion risk analysis, using inter-bank placements and takings, depicted a decline in interconnectedness. The total exposure decreased by 10.86 per cent to
₦523.58 billion, compared with the end-June 2022 position. Further analysis revealed
that six banks accounted for ₦433.16 billion of total placements, while another six
banks accounted for ₦441.69 billion of total takings. The exposures did not pose any
significant threat to financial system stability, as all placements were collateralised.

FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 3.11 Network Analysis based on Interbank Exposures


BOX 2: 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;

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

Node colour representation
Blue = Placement only
Deep Blue = Net Placement
Red = Takings only
Maroon = Net Takings
FINANCIAL STABILITY REPORT – DECEMBER 2022

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 3.8 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 regulatory and supervisory activities on institutions under its purview through offsite surveillance, onsite examination, and issuance of relevant guidelines aimed at promoting a safe, sound, and stable financial system.

3.3.1 Examination
During the review period two commercial banks were licensed, bringing the total
number of banks to 40, comprised of 26 commercial banks, six merchant banks, five
payment service banks, and three Non-Interest Banks (NIBs). The number of authorised
outlets offering non-interest financial products remained five, comprising three banks,
and two non-interest windows.

Routine Risk-Based Examination was conducted on15 commercial and merchant
banks with Composite Risk Rating of “High” and “Above Average”, three full-fledged
NIBs and two non-interest windows. The outcome of the examinations showed that
the banks were sound and stable. Some issues on corporate governance, prudential
and Shariah compliance were noted and appropriate regulatory actions taken.

3.3.2 Non-Interest Banks
The total assets of NIBs grew by 30.62 per cent to N714.59 billion, while total deposits
grew by 38.21 per cent to N504.60 billion, compared with the end-June 2022 position.
Conversely, total credit reduced by 2.8 per cent to N253.55 billion.

3.3.3 Supervision of Domestic Systemically Important Banks
The five Domestic Systemically Important Banks (D-SIBs) maintained their designation
during the period under review. The enhanced supervision of the banks was sustained
in view of the significant impact the failure of any of them could have on the financial
FINANCIAL STABILITY REPORT – DECEMBER 2022

system. The Recovery and Resolution Plans (RRPs) of the D-SIBs were reviewed in the
period, and observed lapses were communicated to the banks for remedial actions.
The D-SIBs accounted for 60.47 per cent (N44.07 trillion), 59.91 per cent (N27.26 trillion)
and 56.53 per cent (N16.79 trillion) of the industry’s total assets, deposits and credits,
compared with 57.62 per cent (N37.73 trillion), 60.45 per cent (N25.41 trillion) and 56.16
per cent (N15.22 trillion) respectively, at end-June 2022.

The D-SIBs were largely compliant with prudential requirements during the review period.

3.3.4 Asset Management Corporation of Nigeria
Asset Management Corporation of Nigeria (AMCON) total assets and liabilities were
N989.89 billion and N5.60 trillion, compared with N896.49 billion and N5.72 trillion respectively, in the preceding period. However, the carrying value of AMCON Note and
Loan (Debenture) remained N3.86 trillion and N500 billion, respectively.

The sum of N120.27 billion (cash - N118.78 billion - and asset forfeitures - N1.49 billion)
was recovered in the second half of 2022, compared with N56.88 billion (cash - N53.95
billion - and asset forfeitures - N2.93 billion) in the first half.

A target examination of AMCON was conducted within the review period. The examination included a review of assets under management, disposal of assets, loan administration and management of eligible bank assets (EBAs), sales of shares, earnings,
statement of financial position, third party service providers, validation of collaterals
and regulatory compliance.

The Corporation’s operation and processes were adjudged to be materially compliant with the provisions of its Act. The Examiners’ recommendations were communicated for implementation.

3.3.5 Cross Border Supervision of Nigerian Banks
3.3.5.1 Foreign Subsidiaries 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, at end-December 2022.

3.3.5.2 Onsite Examination of Offshore Subsidiaries of Banks
The Bank conducted routine and AML examinations of 10 offshore subsidiaries of Nigerian banks. These activities were designed to validate the returns submitted by the
parent banks and address supervisory concerns noted in the operations of the offshore subsidiaries.

FINANCIAL STABILITY REPORT – DECEMBER 2022

The examinations revealed issues such as elevated NPL ratios, credit concentration,
partial compliance with the requirements for board composition, and IT-related concerns. The recommended remedial actions were communicated to the affected parent banks.

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

3.4.1 Community of African Banking Supervisors
The Community of African Banking Supervisors (CABS) Working Group on Crisis Management, Bank Resolution and Fintech, led by the Bank, completed the draft “Framework on Crisis Management, Banking Resolution and FinTech Supervision”. The framework was exposed to the Association of African Central Banks (AACB).

The Bank participated in a Crisis Simulation Exercise (CSE) organised by the Financial
Stability Institute Basel, Switzerland. The overarching objective of the CSE was to enable the participating authorities to verify the effectiveness of crisis management arrangements, resolution toolkits, cross-border cooperation and information-sharing in
the event of failure of a cross-border bank.

3.4.2 College of Supervisors of the West African Monetary Zone
The Bank participated in the 42nd and 43rd meetings of the College of Supervisors of
the West African Monetary Zone (CSWAMZ) where developments in the banking system,
cross-border supervision, joint examination, Basel II/III capital requirements, IFRS 9 &16
as well as other relevant financial stability concerns of the sub-region, were reviewed.

3.4.3 Technical Support to Other Central Banks
During the period under review, the Bank hosted representatives from two central
banks to understudy its consumer protection and quality assurance functions and
build capacity on the regulation and supervision of financial holding companies
and development banks.

3.5
Credit Risk Management System
The Credit Risk Management System (CRMS) database remained a veritable 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 26.14 per cent to
43,320,180, compared with the level at end-June 2022. Similarly, the number of facilities with outstanding balances increased by 79.23 per cent to 9,579,073.


FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 3.9 Credit Risk Management System
Borrowers from the Banking Sector (Commercial, Merchant and Non-Interest Banks)
Description

End-Jun

End-Dec

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 number of licensed credit bureaux remained three at end-December 2022. The
total number of uniquely identified credit records was 77.59 million, an increase of
15.42 million, compared with the position during the preceding period. The increase
was attributed to growth in credit in the banking sector, increased coverage, and
enhanced awareness of the activities of credit bureaux in the management of credit
risk.

Similarly, the average number of subscribers to the credit bureaux increased by 5.22
per cent to 1,316 at end-December 2022.

Table 3.10 Credit Bureaux Statistics
S/N Description
CRC Credit Bureau Ltd
CR Services
Credit Bureau
Plc
First Central
Credit Bureau
Ltd

Number of credit records
76,025,129
97,511,934
59,245,678

Value of Credit Facilities
(N’Tn)
43.73
44.13
29.15

Number of borrowers
30,957,982
17,793,022
21,735,851

Number of subscribers
1,738

1,494

3.7
Supervision of Other Financial Institutions
Onsite examination of 3,150 BDCs was conducted in the second half of 2022. The examination revealed various infractions and the erring institutions were penalised in line
with the CBN AML/CFT (Administrative Sanctions) Regulations of 2018 and other extant
regulations. The Bank also participated in a national risk assessment for the OFIs sub-
sector coordinated by the Nigerian Financial Intelligence Unit (NFIU).


FINANCIAL STABILITY REPORT – DECEMBER 2022

3.8
Supervision of Holding Companies
The Bank in collaboration with the NDIC, SEC, NAICOM and PenCom conducted the
consolidated examination of five Financial Holding Companies and their subsidiaries,
using the RBS approach, during the review period. The examination covered
Knowledge of Business (KOB), Risk Assessment Summary (RAS) and solo examination
of each entity within the Holding Company.

3.9
Supervision of Capital Market Entities
On-site inspection of the 95 registered Fund Managers was undertaken to ensure that
public and private CIS funds registered by SEC were being operated in line with the
relevant Rules and Regulations.

RBS examination was conducted on 95 fund managers and 20 capital market subsidiaries of holding companies. The examinations were aimed at ensuring the continuous
stability of the entire financial system.

3.10
Other Developments in the Financial System
3.10.1 Anti-Money Laundering, Combating the Financing of Terrorism and Countering
Proliferation Financing
The Bank continued its surveillance to ensure that the banking system remained secure and safe from money laundering, terrorism financing and other criminal activities.
In this regard, the review of periodic returns on politically exposed persons, threetiered KYC, annual and quarterly employee trainings, monitoring of employee conducts, among others, revealed that banks were largely compliant with the regulatory
requirements in the second half of 2022.
Furthermore, the Bank issued the following Guidance Notes:

• Guidance on Targeted Financial Sanctions on Terrorism Financing 2022;
• Guidance on Targeted Financial Sanctions on Proliferation Financing 2022;
• AML/CFT/CPF Manual for Licensing of Banks and Other Financial Institutions;
and
• The AML/CFT/CPF Supervisory Framework.

3.10.2 Mutual Evaluation Report
In 2019, the Financial Action Task Force (FATF) conducted the Mutual Evaluation of
Nigeria’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) system.
Sequel to the evaluation, Nigeria was placed on the Enhanced Follow-up (EFUP) and
International Cooperation Review Group (ICRG) Processes.

The significant deficiencies identified in the Mutual Evaluation Report (MER) included
inadequate risk assessments, weak financial intelligence, ineffective supervision and
enforcement, and lack of coordination between law enforcement agencies. Nigeria
has made some progress in addressing the identified deficiencies and applied for rerating on seven recommendations. However, only five recommendations were rerated during the 1st Follow-Up (FUR) Report to the Inter-Governmental Action Group
against Money Laundering in West Africa (GIABA) in November 2022.
FINANCIAL STABILITY REPORT – DECEMBER 2022

The five Recommendations re-rated for Technical Compliance (TC) were:

Recommendation 3 on Money Laundering: Re-rated from partially compliant
to compliant

Recommendation 7 on Targeted financial sanctions related to proliferation:
Re-rated from partially compliant to largely compliant

Recommendation 11 on Record-keeping: Re-rated from partially compliant to
compliant

Recommendation 19 on Higher-risk countries: Re-rated from partially compliant
to largely compliant; and

Recommendation 20 on Reporting of suspicious transactions: Re-rated from
partially compliant to compliant.

Nigeria will submit its 2nd Follow-Up Report to the GIABA Secretariat for discussion at
the November 2023 Plenary.

3.10.3 Capacity Building
In the second half of 2022, the Bank conducted in-house training for its Examiners on
Beneficial Ownership, Private Banking, Know Your Customer/Customer Due Diligence,
and Screening of Non-Governmental Organisation accounts on terrorism financing.
Also, in collaboration with NFIU and NIBSS; the Bank trained OFIs operators in various
aspects of AML/CFT/CPF laws and regulations, risk assessment and effective ML/TF/PF
risk management.
On completion of the Microfinance Certification Programme, the Chartered Institute
of Bankers of Nigeria (CIBN) certified 289 staff of MFBs, bringing the total number of
certified MFB staff to 8,389 at end-December 2022.

3.10.4 Financial Services Regulation Coordinating Committee
The Financial Services Regulation Coordinating Committee (FSRCC) sustained the sensitisation of the public against the activities of Ponzi Schemes/Illegal Fund Operators.
Furthermore, the FSRCC developed the “Framework on Curtailing the Activities of Illegal Fund Operators (IFOs)”. The Framework provides modalities for investigation, closure of business, complaints management and prosecution of promoters of IFOs.

3.10.5 Regulation and Supervision of Non-Interest Financial Institutions in Nigeria
During the period under review, one non-interest Microfinance Bank was licensed,
bringing the total number of licensed authorised non-interest outlets to 10, comprising
three non-interest banks, two non-interest windows and five non-interest MFBs.

The Financial Regulation Advisory Council of Experts (FRACE) held four statutory meetings and reviewed documents on non-interest financial products and services. The
Council also approved the structure and transaction documents of Sukuk issuances.

FINANCIAL STABILITY REPORT – DECEMBER 2022

3.10.6 Code of Corporate Governance for Banks and Guidelines for Whistle-Blowing
To promote the entrenchment of sound corporate governance practices and ascertain compliance with the “CBN Code of Corporate Governance for Banks and Discount Houses”, the Bank conducted Corporate Governance Scorecard Assessment
on eight banks. All the banks were rated “Acceptable”.

3.10.7 eNaira
During the review period, the Bank sustained efforts to promote the eNaira, Africa’s
first Central Bank Digital Currency (CBDC). Thus, the Bank integrated the eNaira with
data custodians, including NIBSS and Nigeria Identity Management Commission
(NIMC) to facilitate verification of Bank Verification Number (BVN), National Identity
Number (NIN), Tax Identification Number (TIN) and phone numbers during the
onboarding of customers and merchants.

The Bank also facilitated the interoperability of eNaira on financial institutions’ platforms which allows users to move funds from accounts with the institutions to eNaira
and vice versa. The Bank further collaborated with some PSPs to offer eNaira services
to the public.

To drive financial inclusion and adoption of the eNaira, an Unstructured Supplementary Service Data (USSD) code *997# was introduced during the review period. An
eNaira Hackathon was also conducted to drive innovation towards making eNaira
the payment platform of choice.

The above initiatives resulted in an increase in onboarded customers and active wallets.

Figure 3.11 eNaira Wallet Holders


The total eNaira minted was N5.00 billion, with N2.55 billion in circulation and a balance of N2.45 billion in stock at end-December 2022. Consumer and merchant wallets
accounted for N1.65 billion of the eNaira in circulation, while financial institutions held
the balance.

Onboarded Customers
Active Wallets
End-June-22
244,340
182,790
End-Dec-22
2,290,300
2,232,066


FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 3.12 Minting and Holdings of eNaira

End-Jun -22 (₦’bn)
End-Dec -22
(₦’bn)
Change (%)
eNaira Minted
2.00
5.00
60.00
eNaira in Circulation:
1.55
2.55
39.40
- In FIs' wallets
0.86
1.65
47.78
- In Consumers / Merchants'
wallets
0.68
0.90
24.02
- In Stock with CBN
0.45
2.45
1.44

3.10.8 Nigeria Sustainable Banking Principles
The returns of 29 banks were reviewed and found to comply with extant regulations
on Nigeria Sustainable Banking Principles (NSBPs).

3.10.9 Implementation of Basel III
Basel III implementation, in parallel with the extant Basel II regulation, commenced in
November 2021 following the issuance of the circular Ref: BSD/DIR/PUB/LAB/14/063
dated September 2, 2021. The parallel run was designed to originally lapse in August
2022. However, final cut-over was put on hold to allow the CBN provide all clarifications sought by banks, and more importantly update the draft Basel III regulations in
line with the Basel Committee on Banking Supervision’s (BCBS) revisions of Basel III, encapsulated in ‘Basel III: Finalising Post-crisis Reforms’.

3.10.10 Internal Capital Adequacy Assessment Process
The internal capital adequacy assessment process (ICAAP) reports for 30 banks were
reviewed in the second half of 2022. Thirty-two significant risk types were identified,
comprising the three Pillar I Risks (credit, market, and operational risks) and 29 Pillar II
risks, with credit concentration, interest rate risk in the banking book (IRRBB), strategic,
liquidity and reputational risks being the most dominant.

It was also observed that emerging significant risk types such as climate related risks
were not considered by banks. Observations and recommendations arising from the
review were communicated to the banks for implementation.

3.11
Financial Literacy and Consumer Education
The Bank, in collaboration with relevant stakeholders, sustained its implementation of
various initiatives aimed at deepening financial inclusion and financial literacy to enable consumers understand their rights and responsibilities and improve overall financial system stability during the review period.

The initiatives included:

Global Money Week in collaboration with the Bankers’ Committee;

School Mentoring Programme to entrench savings and other financial literacy
concepts amongst children and youth;
FINANCIAL STABILITY REPORT – DECEMBER 2022

National Peer Group Educator Programme (NAPGEP) in collaboration with the
Federal Ministry of Youth, Sports and Social Development, Nigeria Deposit Insurance Corporation (NDIC) and the National Youth Service Corps (NYSC);

Mainstreaming of financial education into the Nigerian Educational Curricula
at the Basic and Senior Secondary Levels as well as the introduction of Deposit
Insurance courses in some tertiary institutions by NDIC;

Training of Trainers Programmes for various segments of the society, such as
faith-based organisations, youth groups and market associations;

Financial Literacy Awareness Workshops in collaboration with the Shared Agent
- Network Expansion Facility (SANEF);

Establishment of Pass-through Deposit Insurance for subscribers of Mobile
Money Operators by the NDIC; and

Establishment of customer complaints Help Desks by the NDIC.

3.12
Market Conduct and Development
The Bank sustained its monitoring and enforcement activities in furtherance of its mandate towards ensuring market discipline and responsible business conduct through
the following:

Follow up actions to ensure adherence to directives issued during consumer
compliance examinations;


Engagement sessions with the five payment service banks (PSBs) on regulatory
expectations regarding consumer protection; and


Submission of quarterly Root Cause Analysis Report (RCAR) by financial institutions to the Bank on recurring complaints and proactive measures taken.


3.13
Complaints Management and Resolution
The number of complaints against financial institutions increased by 12.58 per cent to
2,738 in the second half of the year. Of the 2,738 complaints, 2,539 were against banks,
while 199 were against OFIs. Electronic/Cards related complaints constituted the highest proportion at 34.99 per cent.

A total of 2,698 complaints were resolved/closed, indicating a decrease of 0.99 per
cent in the second half of 2022, relative to the position in the first half of 2022.

FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 3.12 Number of Complaints Received

Figure 3.13 Complaints Resolved/Closed


-100

End-Jun 2022
End-Dec 2022

End-Jun 2022
End-Dec 2022
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 3.14 Complaints Resolved/Closed


Figure 3.15 Distribution of Complaints Resolved and Closed


Total claims in the review period in local currency and foreign currency amounted to
N1.87 billion and US$105,830.49, as against N8.13 billion and US$11,283.93, in the preceding period, respectively. The sums of N1.49 billion and US$18,691.50 were refunded
to customers in the second half of 2022.


ELECTRONIC/CARDS
35%
FRAUD 35%
ACCOUNT MGT
20%
EXCESS CHARGES
5%
OTHERS 5%
ELECTRONIC/CARDS
FRAUD
ACCOUNT MGT
EXCESS CHARGES
OTHERS

JULY
AUGUST
SEPTEMBER
OCTOBER
NOVEMBER
DECEMBER
NO. OF CASES RESOLVED
NO. OF CASES CLOSED
TOTAL
FINANCIAL STABILITY REPORT – DECEMBER 2022

4.0
DEVELOPMENTS IN THE PAYMENTS SYSTEM
The Bank continued to implement policies and initiatives to improve the safety and
efficiency of the Nigerian Payments System.

4.1
Bank Verification Number
Bank Verification Number (BVN) remains a credible unique identifier that assists financial institutions, credit bureaux and law enforcement agencies, amongst others, to
reduce financial crimes and promote the integrity of the financial system. At end-December 2022, the BVN count stood at 56.50 million, reflecting an increase of 3.27 per
cent. Of the 159.42 million active customer accounts, 127.92 million were linked with
BVNs, while watch-listed BVNs associated with fraud stood at 7,399 at end-December
2022.

Table 4.1 BVN Statistics

End-Jun 2022
End-Dec 2022
Change
(%)
BVNs enrolled
54,651,086
56,499,363
3.27
Accounts linked with BVNs
130,569,656
127,916,574
(2.07)
Active Accounts
148,462,947
159,421,664
6.87
Watchlisted BVNs (Fraudulent)
6,047
7,399
18.27

4.2
Licensing of Payments Service Providers
During the review period, commercial licences were issued to 15 payments service
providers (PSPs), comprising one mobile money operator (MMO), three switching &
processing companies, three payments solution service providers, one payments terminal service provider and seven super-agents, bringing the total number to 129.

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

Mobile Money Operator Licence Category

Switching/Processing Licence Category

Payment Solution Services Licence Category

Payment Terminal Services Provider (PTSP) Authorisation

Payment Solution Service Provider (PSSP) Authorisation

Super-Agent Authorisation

Total

4.2.1 Oversight & Compliance Assessment of Payments Service Providers
The Bank, in its efforts to promote a safe, reliable and efficient payments system, carried out oversight and compliance assessments of PSPs within the review period.
FINANCIAL STABILITY REPORT – DECEMBER 2022

4.2.2 Routine Compliance Assessment of Payments Service Providers
The Bank conducted routine oversight and compliance assessments of 10 licensed
institutions during the review period to ascertain the institutions’ compliance with relevant frameworks, guidelines and policies governing the various operations in accordance with the licence categories. Most of the institutions complied with the regulatory requirements. Financial penalties were imposed for more severe contraventions, while warnings were issued for less severe contraventions to non-compliant institutions.

4.2.3 Maiden Examination
Maiden examination of 33 newly licensed PSPs was conducted in the review period
to confirm that structures for regulatory compliance upon commencement of commercial operations had been established.

4.2.4 Special Examination of Mobile Money Operators
A special examination of eight MMOs was carried out in the second half of 2022 to
identify risk the operators may pose to the financial system. One operator was penalised for non-compliance with extant regulations, while others were issued warnings for
facilitating activities of unlicensed entities and deploying non-card neutral PoS terminals.

4.2.5 AML/CFT/CPF Assessment of Payments Service Providers
Following the designation of PSPs as other financial institutions in BOFIA 2020, an examination was conducted on 36 PSPs during the review period, to assess compliance
with the requirements of CBN AML/CFT/CPF Regulations, Policies and Guidelines and
Laws. Appropriate regulatory measures were taken to address observed lapses.

4.3
Cheque Standards and Cheque Printers’ Accreditation Scheme
In line with the provisions of the Nigeria Cheque Printers’ Accreditation Scheme
(NICPAS) aimed at improving the safety and efficiency of the cheque clearing system,
the Bank conducted accreditation of cheque printers and cheque personalizers. The
licences of three existing cheque printers were renewed and five cheque personalizers were accredited. Consequently, the total number of security printing companies
with valid accreditation increased to six and that of accredited cheque personalizers
to eight at end-December 2022.

4.4
Payments System Vision 2025
During the review period, the Payments System Vision 2025 (PSV2025) was launched
with a focus on contemporary developments that would drive digital innovations in
the Nigerian payments system. Areas of focus include QR codes, contactless payments, request to pay, cybersecurity, open banking, big data, and Distributed Ledger
Technology.

FINANCIAL STABILITY REPORT – DECEMBER 2022

4.5
Payments System Statistics and Trend
4.5.1 Large Value Payments
The volume and value of inter-bank fund transfers through the CBN RTGS System decreased to 139,179 and N36,792.58 billion, from 149,035 and N36,913.90 billion at endJune 2022, indicating decreases of 7.08 and 0.33 per cent, respectively. The decreases
signalled relatively lower liquidity in the inter-bank market and reflected the contractionary monetary stance during the review period.

4.5.2 Retail Payments
4.5.2.1 Cheque Clearing
The volume of cheques cleared, decreased to 1,995,934 from 2,077,679 at end-June
2022 while the value increased to N1,611.61 billion at end-December 2022, from
N1,593.43 billion at end-June 2022. These outcomes indicated a decrease of 4.10 per
cent and an increase of 1.13 per cent, in volume and value, respectively. The decrease in volume of cheques cleared reflected sustained customers’ preference for
electronic transactions.

4.5.2.2 Electronic Transactions
The volume and value of electronic transactions increased by 14.06 and 28.87 per
cent to 12,182,547,256 and N927,756.07 billion, respectively, during the review period.
The surge in the usage of electronic payments for banking transactions was due to
the convenience provided by the channels and increased public confidence in the
banking system.

Figure 4.1 Volume of Electronic Transactions


N'Billion
End-Jun 2022
End-Dec 2022
FINANCIAL STABILITY REPORT – DECEMBER 2022

Figure 4.2 Value of Electronic Transactions


Table 4.3 Highlights of Electronic Transactions
Payment
Channels
Number of Connected
Terminals
Volume of Transactions
Value N’ Billion

End-Jun

End-Dec

Jan-Jun 2022
Jul-Dec 2022
Change
(%)
Jan-Jun

Jul-Dec

Change
(%)


ATMs


POS

Mobile
Money

Online
Transfers
(Internet/Web)

Mobile
App

USSD

Direct
Debit

ACH/NEFT

Total


End-Jun 2022
End-Dec 2022
N' Billion
ATMs
POS
Mobile Money
Online Transfers (Internet/Web)
Mobile App
USSD
Direct Debit
ACH/NEFT
FINANCIAL STABILITY REPORT – DECEMBER 2022

5.0
Nigeria Deposit Insurance Corporation
The Nigeria Deposit Insurance Corporation (NDIC) provides deposit insurance coverage and plays a complementary role in prudential oversight and resolution responsibilities with the Bank, contributing to financial system stability and promoting public
confidence in the banking system.

5.1
Deposit Guarantee
At end-December 2022, the NDIC provided deposit insurance coverage to commercial banks, merchant banks, NIBs, MFBs, PMBs, PSBs and MMOs.

In 2008 the NDIC transited from flat rate premium assessment to Differential Premium
Assessment System (DPAS) which was applied to commercial and merchant banks
(DMBs). Subsequently, it was adopted to NIBs in 2012, PMBs in 2017 and MFBs and PSBs
in 2021.

The DPAS aimed at differentiating premium rates based on individual bank risk profiles.
In 2022, DMBs maximum premium rates were 0.57, 0.41 and 0.35 per cent for highest,
average, and lowest risk categories, respectively, all below the regulatory threshold
of 0.65 per cent.

In addition, the maximum coverage limit remained ₦500,000 per depositor of DMBs,
PMBs, PSBs and subscribers of MMOs, while that of MFBs was ₦200,000.

5.2
Deposit Insurance Funds
5.2.1 Commercial and Merchant Banks
As at December 31, 2022, the Deposit Insurance Fund (DIF) stood at ₦1.74 trillion,
which covered 30.58 per cent of commercial and merchant banks’ total insured deposits of ₦5.69 trillion, compared with the DIF of ₦1.71 trillion, which covered 33.92 per
cent of insured deposits of ₦5.03 trillion at end-June 2022.

5.2.2 Non-Interest Banks
The Non-Interest Deposit Insurance Fund (NIDIF) was ₦22.46 billion (42.15 per cent) of
the NIBs/NIB Windows insured deposits of ₦53.29 billion at end-December 2022, compared with ₦20.22 billion (46.38 per cent) of insured deposits of ₦43.60 billion at endJune 2022.

5.2.3 Payments Service Banks
The Payment Service Deposit Insurance Fund (PSDIF) of ₦4.9 million covered 0.10 per
cent of insured deposits of N4.74 billion at end-December 2022, compared with PSDIF
of ₦1.32 million which covered 0.01 per cent of insured deposits of N13.88 billion at
end-June 2022.

5.2.4 Payment of Insured Deposits and Liquidation Dividend
5.2.4.1 Payments to Insured Depositors of Closed Insured Banks
From start of payments in 1994 to end-December 2022, the NDIC has made insured
payments of ₦8.27 billion to 443,959, depositors of the 49 closed DMBs, ₦3.45 billion to
FINANCIAL STABILITY REPORT – DECEMBER 2022

91,412 depositors of the 367 closed MFBs and ₦119.45 million to 1,681 depositors of the
51 closed. Furthermore, a cumulative sum of ₦101.450 billion, ₦12.68 million and
₦211.36 million has been paid to uninsured depositors of DMBs, MFBs and PMBs inliquidation, respectively; while the sum of N1.28 billion and ₦4.89 billion had been paid
to 1,027 creditors and 970 shareholders of DMBs in-liquidation, respectively.

Table 5.1 below shows a comparison of the insured and uninsured payments to depositors of banks-in-liquidation during the first half of 2022 and second half of 2022.

Table 4.1 Payments to Insured and Uninsured Depositors of Banks In-Liquidation
Insured Depositors
Uninsured Depositors

First Half 2022
Second Half

First Half 2022
Second Half

₦
₦
₦
₦
DMBs

PMBs

MFBs
5,205,408.83
22,812,443.31
1,275,547.36

GRAND TOTAL


5.3
Recovery of Failed Bank Assets
5.3.1 Risk Assets Recovery
Cumulative recovery of risk assets for the DMBs in-liquidation from 1994 to end-December 2022 was ₦30,963.55 million. From September 2010 to end-December 2022, the
cumulative recovery for the MFBs and PMBs were ₦306.86 million and ₦788.29 million,
respectively.

As of December 31, 2022, the cumulative realization since inception from Physical Assets and Rent collected on properties of banks in-liquidation stood at ₦23,464.77 million. The figure comprised ₦22,306.73 million, ₦932.37 million and ₦225.67 million for
DMBs, MFBs and PMBs in-liquidation, respectively.

The cumulative sum realized from investments of banks in-liquidation from inception
to December 31, 2022 was ₦4,932.48 million. A total of ₦4,777.74 million was realized
from investments of DMBs from 1994 to December 31, 2022, while ₦88.38 million and
₦66.36 million were realized from 2010 to end-December 2022 for MFBs and PMBs, respectively.

In the period under review, N246.93 million was recovered from banks in-liquidation
indicating a decrease of 63.48 per cent relative to the outcome at end-June 2022.
Similarly, N71.25 million was realised from rent and sale of physical assets and N7.10
million from investments, representing a decrease of 72.35 and 84.71 per cent respectively, relative to the position in the first half of 2022.


FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 4.2 Loan Recoveries

First Half

Proportion of Recoveries
Second Half

Proportion of Recoveries

₦’m
(%)
₦’m
(%)
DMBs

PMBs

MFBs

Grand Total
676.24

246.93

Table 4.3 Disposal of Physical Assets and Realisation of Investments from Bank In-liquidation

Disposal of Physical Assets
Realisation of Investments

First Half 2022
Second Half 2022
First Half 2022
Second Half

₦’m
₦’m
₦’m
₦’m
DMBs
150.00
0.57
41.45

PMBs
-
21.81
0.10

MFBs

Grand Total


5.4
Other Supervisory Activities
The NDIC undertook the following activities:

Reviewed the adequacy of Fidelity Insurance Coverage, in line with Section 33
of the NDIC Act 2006, and determined that 22 DMBs and two PSBs met the
requirement at end-December 2022

Received 245 whistle-blowing cases from DMBs, compared with 267 in the first
half of 2022. The cases involved service delivery inadequacies, theft and cash
suppression, among others

Treated 917 out of 942 requests to conduct due diligence on prospective appointees in the financial sector

Treated 95 out of 125 whistle-blowing cases received from DMBs in the second
half 2022 compared with the 175 cases received in the first half of 2022. The
outstanding balance of 30 cases as of 31st December 2022, were being investigated. The cases involved service delivery inadequacies, theft, and cash suppression, among others

Deployed Single Customer View (SCV) reporting template, designed to ensure
unique and consistent information on eligible bank customers for faster payout of insured claims.


FINANCIAL STABILITY REPORT – DECEMBER 2022

6.0
PENSIONS
During the review period, total membership of pension schemes grew to 9.86 million
from 9.71 million in the first half of 2022. The growth was due largely to the steady uptake of the Micro Pension Plan by workers in the informal sector.

Furthermore, the net Pension Assets under Management, grew to N14.99 trillion from
N14.27 trillion in the first half of 2022. The growth was due to return on investments and
additional contributions during the review period. The funds were largely invested in
FGN securities.

6.1
Other Developments in the Nigerian Pension Industry
Other key developments in the pension industry during the review period included:

Payment of ₦1.17 billion Accrued Pension Rights to 575 beneficiaries, bringing
the total for the year to ₦1,001.54 billion in favour of 214,754 beneficiaries3

A total of 45,794 contributors transferred their RSAs worth ₦193.32 billion from
their current PFAs to others, in line with the provisions of Section 13 of the Pension
Reform Act 2014

The acquisition of First Guarantee Pension Limited and Sigma Pension Fund
Managers Limited by Access Holdings Plc; and

The implementation of the “Guidelines on Accessing Retirement Savings Account (RSA) Balance towards Payment of Equity Contribution for Residential
Mortgage by RSA Holders” commenced in September 2022.

6.2
Key Risks and Vulnerabilities
Eleven of the 36 states were yet to enact pension laws on the CPS. The key risk to the
pension industry remained state governments’ noncompliance with the provisions of
the PRA and their respective State Pension Laws as only five states were fully compliant. Similarly, compliance in the informal sector remained low.

Furthermore, some government agencies had requested to be exempted from the
CPS, while some individuals clamour to take up to 75.00 per cent of their RSA balances
as lump sum. These, if granted, would stem the growth of pension assets.

However, Pencom sustained engagements with stakeholders to grow pension assets
and deployed agents to recover unremitted pension contributions.


3 Accrued Pension Rights represent the benefits due to employees of Ministries Departments and Agencies for past years of service from commencement of employment to the inception of the CPS on June
30, 2004. The Accrued Pension Rights are FGN funded and determined by applying the rules under the
Defined Benefits Scheme.
FINANCIAL STABILITY REPORT – DECEMBER 2022

7.0
INSURANCE
The insurance industry improved and remained generally stable in the review
period as solvency, liquidity and other key indicators were in healthy positions.

7.1
Assets and Premium Income
The total assets of the industry increased by 1.62 per cent to ₦2.32 trillion, compared
with the first half of the year. The Gross Premium Income rose by 93.63 per cent
to ₦714.9 billion. Similarly, net premium income rose by 95.94 per cent to N510.10
billion, while total gross claims increased by 80.46 per cent to ₦315.4 billion. The improvements were due largely to sustained market development initiatives and public
awareness campaigns.

Table 7.1 Assets and Premium Income
Period
End-June 2022
(₦ billion)
End-Dec 2022
(₦ billion)
Change
(%)
Gross Premium Income
369.21
714.90
93.63
Net Premium Income
260.34
510.10
95.94
Total (Gross) Claims
174.78
315.40
80.46
Total Assets
2,284.00
2,321.00
1.62
Source: NAICOM

7.2
Key Industry Financial Soundness Indicators
The key FSIs reflected the soundness and stability of the industry during the review period, and showed improvement relative to the first half of the year. The highlights were
as follows:

CAR increased by 2.06 percentage points to 44.27 per cent, compared with
the level at end-June 2022, and remained above the regulatory threshold of
40.00 per cent.

The ratio of liquid assets to current liabilities increased by 12.25 percentage
points to 128.90 per cent, which was adequate to accommodate significant
claims.

Premium debtors, measured as a percentage of gross premium, declined by
2.88 percentage points to 5.81 per cent, owing largely to the sustained enforcement of the “no-premium-no-cover” policy.

The retention ratio, measured as insurance premium retained to total premium
generated, rose by 0.26 percentage point to 72.13 per cent, which reflected a
slight improvement in the industry’s capacity to underwrite large insurance policies.

The combined ratio4 for the industry increased marginally by 2.38 percentage
points to 68.76 per cent, from 66.38 per cent at end-June 2022.

4 Combined ratio is a measure of profitability used by insurance companies to gauge how well they are
performing in daily operations.
FINANCIAL STABILITY REPORT – DECEMBER 2022

Table 7.2 Insurance Industry Dashboard
KEY INDICATORS (%)
End-Jun 22
End-Dec 22
Change %
CAR5
42.21
44.27
4.88
Liquidity Ratio
116.65
128.90
10.50
Combined Ratio
66.38
68.76
3.59
Claims Ratio
33.59
35.72
6.34
Expense Ratio
32.79
33.04
0.76
Investment to Total Assets Ratio
64.82
68.65
5.91
Change in Gross Written Premium
36.96
35.30
-4.49
Change in Net Written Premium
35.57
34.61
-2.70
Change in Capital & Surplus
3.03
10.85
258.09
Premium Debtors as a % of Equity
5.74
5.69
-0.87
Premium Debtors as a % of Total Assets
2.93
2.30
-21.50
Premium Debtors as a % of Gross Premium
8.69
5.81
-33.14
Retention Ratio
71.87
72.13
0.36
Return on Assets
1.33
2.19
64.66

7.3
Regulatory and Supervisory Developments
During the review period, NAICOM continued with the implementation of ongoing
policy programmes and development of new initiatives intended to reposition the Nigerian insurance industry for enhanced contribution to the economy. The initiatives
included computerisation of operations, enforcement of compulsory insurance policies and the upward review of premium on motor vehicle insurance.


5 Capital/Asset
FINANCIAL STABILITY REPORT – DECEMBER 2022

8.0
RISKS TO THE FINANCIAL SYSTEM
8.1
Credit Risk
Risk Rating (Medium Risk, Trending upward)

During the review period, credit risk remained stable as the NPL ratio of DMBs and
PMBs was below the regulatory limits at 4.21 and 22.07 per cent. This was due to continued implementation of the Global Standing Instruction (GSI) and enhanced repayment capacity of obligors, reflecting the uptick in economic activities. However, in
the FC sub-sector, the NPL ratio increased to 19.96 per cent, above the 10.0 per cent
regulatory threshold.

Credit risk is expected to trend upwards in the short- to medium-term, impacted by
muted growth, rising inflation resulting in reduced purchasing power of disposable income and obligors’ earning capacity as well as the unwinding of regulatory forbearances.

However, the enhanced risk management regime by operators and sustained implementation of various regulations, such as the Basel principles, GSI and Guidelines for
Regulation and Supervision of Credit Guarantee Companies in Nigeria are expected
to moderate the impact of the risk.

8.2
Liquidity Risk
Risk Rating (Low Risk, Stable)

Industry liquidity was robust during the review period as the liquidity ratios of PMBs,
DMBs, and MFBs were all above the regulatory benchmarks. The liquidity position was
driven by fixed income maturities, coupon payments, allocations by the Federation
Account Allocation Committee (FAAC) as well as the implementation of the Naira
redesign policy.

The open-buy-back (OBB) weighted daily average rate also reflected stable liquidity
in the banking system at end-December 2022. Liquidity risk is expected to remain low
and stable despite the asset and liability mismatches and funding gaps at the shortterm maturity buckets.

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

The domestic financial market remained resilient despite the adverse effect of Russia-
Ukraine war on the currency and capital market performances, the hawkish monetary
policy stance and uncertainties surrounding the 2023 general elections.
FINANCIAL STABILITY REPORT – DECEMBER 2022

The performance of the market was buoyed by financing of the 2022 FGN budget
deficit, stable liquidity in the system, and new issues of Corporate, FGN Saving and
Corporate Green bonds.

Market risk is expected to trend upwards as tightened financial conditions, foreign
capital reversals caused by rising global interest rates, and the downgrade of Nigeria’s
sovereign debt rating could result in lower asset prices and demand pressure on the
foreign exchange market. However, expected increase in remittances due to sustained implementation of the Naira4Dollar and the RT200 foreign exchange policies
of the Bank, and the likely removal of petroleum subsidy by the fiscal authority could
enhance foreign exchange availability.

8.4
Operational Risk
Risk Rating (High, Trending up)
Operational risk during the review period rose, owing mainly to higher operational
costs driven by the higher petroleum product prices and bi-annual upward review of
electricity tariffs. The increased incidence of fraud through fake mobile applications,
fake internet banking websites, sim swap, and system breaches also contributed to
the trend.

Reported losses from fraud and forgeries in banks increased by 100.00 per cent to
N8.24 billion, compared with the position in the first half of 2022, although the number
of cases fell by 11,640 to 79,951.

The increased adoption of digitised financial channels, cloud services, remote work,
and high attrition of Information Technology personnel from banks, increased cybersecurity vulnerabilities in the review period.

Overall, operational risk is expected to trend upwards owing to heightened cyberattacks and increasing energy costs. Also, emerging third-party and Environmental,
Social & Governance (ESG) risks could increase operational risk.

However, the effects of the Nigerian Data Protection Regulation (NDPR), Nigeria electronic Fraud Forum (NeFF), industry cyber-incident reporting portal, staff training and
consumer education, among other regulatory measures, would continue to mitigate
risks.

8.5
Macroeconomic Risk
Risk Rating (High Risk, Trending up)
During the review period, the global economy witnessed an unprecedented rise in
inflation following the Russia-Ukraine crisis and the resurgence of Covid-19 pandemic
FINANCIAL STABILITY REPORT – DECEMBER 2022

in major industrial cities in China which resulted in supply chain disruptions. This was
exacerbated in Africa by outbreak of the Ebola and Marburg virus diseases.

The increased cost of servicing public debt vis-à-vis the underperformance of the oil
sector, as oil production remained below the 2022 budget benchmark of 1.88mmb/d
at end-December 2022, constrained government revenue outcomes.

Overall, macroeconomic risks remains elevated in the short to medium-term, with increasing risk of broad economic slowdown. The likely removal of petroleum subsidy,
bi-annual increase in electricity tariffs, election-related spending and security challenges are also expected to exacerbate inflationary pressures.

However, the Bank’s sustained development finance interventions to priority sectors
as well as the implementation of the Medium-Term Development Plan (2021-2025) are
expected to strengthen economic recovery.


FINANCIAL STABILITY REPORT – DECEMBER 2022

9.0
OUTLOOK
The medium-term economic outlook for the global economy remains uncertain, owing to the effects of the Russia-Ukraine crisis, resurgence of the Covid-19 pandemic in
major industrial cities of China, and contractionary monetary policy stance adopted
to curb elevated global inflation. Also, rising levels of corporate and public debt in
most economies as well as the broad shocks to foreign capital flows following the
sustained interest rate hikes by most central banks continued to depress the economic
outlook. Aggregate global demand is expected to weaken on account of supplyside constraints and lacklustre economic conditions, leading to lower global output
of 2.90 per cent in 2023.

Global inflation is expected to remain elevated in 2023, rising above the long-run inflation targets of most central banks, owing mainly to the high prices of food, energy
and other commodities. In the prevailing circumstances, central banks might need to
sustain a tightened monetary policy stance to contain inflationary pressures which
could adversely impact the financial system. Furthermore, financial regulators need
to continuously assess and monitor existing and emerging risks and vulnerabilities to
the financial system, with a view to deploying appropriate macro and micro prudential tools to mitigate them.

The domestic economy is projected to sustain its post Covid-19 pandemic recovery
with an estimated growth of 2.88 per cent, premised on the increasing contribution of
the non-oil sector as well as sustained policy support. However, shocks from the external environment, persistent security challenges, uncertainty over the general elections
and challenges in crude oil production, continue to threaten the expected growth.
Furthermore, inflationary pressures are expected to persist in the build-up to the 2023
general elections, owing to increased electioneering spending. Consequently, average inflation in 2023 is projected at 22.42 per cent. However, appropriate policy
measures put in place by the monetary and fiscal authorities are expected to moderate the risks.

Increased participation is envisaged in the domestic financial markets as digital issuance of securities, commodities trading, custodial services, FinTechs and pension
funds continue to expand. Also, the implementation of the Revised Capital Market
Master Plan 2021 – 2025, is expected to increase investors’ confidence and participation, while higher yields from fixed income securities would raise nominal returns and
influence portfolio rebalancing.

The insurance industry is expected to grow with the continued recapitalisation drive
and market development initiatives, including the upward revision of motor vehicle
insurance premiums, and increased engagement with stakeholders to facilitate passage of the Insurance bill.

FINANCIAL STABILITY REPORT – DECEMBER 2022

The overall outlook for banks is positive, given the robust financial soundness indicators. The payments system remains strong, underscored by the Bank’s drive for increased financial inclusion, implementation of the Naira redesign policy and promotion of electronic transactions, including the introduction of eNaira.

The financial system remains resilient, and the Bank will continue to promote its stability
through enhanced collaboration with other regulatory agencies to regulate and supervise financial institutions.


FINANCIAL STABILITY REPORT – DECEMBER 2022

APPENDIX 1: INDICES OF SELECTED STOCK MARKETS
Country
Index
End-Dec

(1)
End-Dec

(2)
End-Jun

(3)
End-Dec

(4)
%
Chang
e (2) &
(4)
%
Change
(3) & (4)
AFRICA
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

NORTH AMERICA
US
S&P 500

Canada
S&P/TSX Composite

Mexico
Bolsa

SOUTH AMERICA
Brazil
Bovespa Stock

Argentina
Merval

Columbia
COLCAP

EUROPE
UK
FTSE 100

France
CAC 40

Germany
DAX

ASIA
Japan
NIKKEI 225

China
Shanghai SE A

India
BSE Sensex

Bloomberg:


FINANCIAL STABILITY REPORT – DECEMBER 2022

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

Europe

UK

US

Canada

South Korea

New Zealand

Australia

Asi
a
Indonesia

Malaysia

BRICS
Brazil

Russia

India

China

South Africa


Other
Emerging
Economies &
South
America
Mexico

Chile

Columbia

Africa
Egypt

Ghana

Nigeria

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


FINANCIAL STABILITY REPORT – DECEMBER 2022

APPENDIX 3: REAL SECTOR INTERVENTIONS: SUMMARY OF DISBURSEMENTS AND
REPAYMENTS IN 2022
S/N
Intervention
Disbursement
(₦' Billion)
End-Jun

Repayment
(₦' Billion)
End-Jun

Disbursement
(₦’ Billion)
End-Dec

Repayment
(₦’ Billion)
End-Dec

1.
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)

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 & RefinancingFacility (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)

Nigerian Youth Intervention Fund (NYIF)

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

Tertiary Institution Entrepreneurship Scheme
(TIES)

Anchor Borrowers Programme (ABP)

Accelerated
Agricultural
Development
Scheme (AADS)

Commercial Agriculture Credit Scheme (CACS)

Paddy Aggregated Scheme (PAS)

National Food Support Programme (NFSP)

Non-Oil Export Stimulation Facility (NESF)

Export Facilitation Initiative (EFI)

FINANCIAL STABILITY REPORT – DECEMBER 2022

S/N
Intervention
Disbursement
(₦' Billion)
End-Jun

Repayment
(₦' Billion)
End-Jun

Disbursement
(₦’ Billion)
End-Dec

Repayment
(₦’ Billion)
End-Dec

30.
Presidential Fertilizer Initiative (PFI)

Export Development Fund (EDF)

Micro, Small and Medium Enterprise Development Fund (MSMEDF)

Shared Agency Network Expansion Facility
(SANEF)


FINANCIAL STABILITY REPORT – DECEMBER 2022

APPENDIX 4: PENSION INDUSTRY PORTFOLIO FOR THE PERIOD ENDED 31 DECEMBER 2022

Existing Schemes
₦ 'Billion
CPFAs
₦'Billion
FUND I
₦ ' Billion
FUND II
₦ ' Billion
FUND III
₦ ' Billion
FUND
IV
₦'Million
FUND
V
₦'Million
FUN
D VI
RETIREE
₦'Mil
lion
TOTAL
PENSION
FUND ASSETS
₦'Million
TOTAL
PENSION
FUND ASSETS
%
Domestic
Ordinary
Shares

Foreign Ordinary Shares

Total FGN Securities

Fed.
Govt
Bonds
(HTM)

* Treasury Bills

Agency
Bonds
(NMRC)

* Sukuk Bonds

* Green Bonds

State Govt Securities

Corp. Debt Securities

Corporate
Bonds
(HTM)

Corporate
Bonds
(Afs)

* Corporate Infrastructure Bonds

Corporate
Green
Bonds

Money Mkt Instr.

Fixed Deposit/ Bank Acceptance

Commercial Papers

Foreign Money Mkt Instr.

Mutual Funds

Open/Close Funds

REITS

Supra-National Bonds

Infrastructure Funds

Real Estate

Private Equities

Cash & Other Assets

Current
Net
Asset
Value

Previous
Net
Asset
Value


FINANCIAL STABILITY REPORT – DECEMBER 2022

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.M. Aliyu
Financial Policy and Regulation Department, CBN
6. O. Abraham (PhD.)
Development Finance Department, CBN
7. S.O. Odeniran (PhD.)
Monetary Policy Department, CBN
8. J. Yakubu
Research Department, CBN
9. N.A. Akwashiki CFA
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. M.K. Muazu
Consumer Protection Department, CBN
18. H. Abdullahi
Banking Services Department, CBN
19. J.K. Ajala
Banking Services Department, CBN
20. R. O. Yusuf (PhD.)
Payments System Management Department, CBN
21. O.
Umeano
CFA,
PhD.
Securities and Exchange Commission
22. M. Mammada
Nigeria Insurance Commission
23. Bilyaminu Yakubu
National Pension Commission
24. 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


Central Bank of Nigeria
Central Bank of Nigeria
Plot 33, Abubakar Tafawa Balewa Way
Central Business District, Cadastral Zone, Abuja,
Federal Capital Territory
Telephone: +234 700 225 5226
Toll free line: +234 800 225 5226
Email: