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Stanbic IBTC Bank To Improve Lending To Real Sector



Stanbic IBTC Bank Plc is set to improve on its lending to real sector of the economy, hence, grew its Loan to Deposit Ratio (LDR) by 69 per cent.

With the regulatory measures to improve lending to the real sector, the Central Bank of Nigeria (CBN) had earlier directed banks to maintain a minimum 65 per cent LDR.

Stanbic IBTC Bank stated that, “the focus and concerted efforts of its management to ensure compliance with the regulatory directive of improving lending to the real sector of the Nigerian economy have been responsible for the growth in the bank’s risk asset portfolio over the last two years.

The loan book increased by 18 per cent from full year 2019 position of N556.4 billion to N655.3 billion as at December 31, 2020.

The bank also recorded an increased loan growth by 30 per cent from December 31, 2020 position to a gross risk asset position of N854.9 billion recorded as at September 30, 2021.

Consequent upon the significant growth recorded in the bank’s risk asset growth in 2020 and year-to-date (YTD) 2021, the bank has remained compliant with the CBN’s daily minimum LDR requirement of 65 per cent with a full year 2020 daily LDR average of 65.84 per cent and 2021 YTD daily average of 69.86 per cent.

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“It is important to note that the bank suffered no Cash Reserve Requirement (CRR) debits by the CBN for non-compliance with the regulatory LDR directive over the period,” it pointed out.

The bank said: “the growth in the Bank’s CRR position from N369.0 billion as at December 31, 2020 to N462.6 billion as at September 30, 2021 has been largely on account of the monetary policy actions introduced by the CBN to rein in inflationary and exchange rate pressures in the economy.

“In line with its price stability and monetary policy mandates, the CBN is saddled with the responsibility of managing surplus liquidity in the system and at various times over the period, the CBN has introduced special CRR debits to sterilize surplus market liquidity.

“These special CRR debits which are over and above the minimum regulatory cash reserving requirement of 27.5 per cent of customer deposit growth have indeed been responsible for the growth in Stanbic IBTC Bank’s total and effective CRR positions which stood at N462.6 billion and 60.09 per cent respectively as at September 30, 2021.”

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The bank added that, “notwithstanding the financial constraints arising from the sterilised liquidity from the CBN, we remain very liquid and adequately capitalized with liquidity ratio and capital adequacy ratio standing at 96.2 per cent and 15.7 per cent respectively as at September 30, 2021 and above the regulatory minimum of 30 per cent for liquidity ratio and eight per cent for capital adequacy ratio.”

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