Banks Intensify Drive to Meet 60% Loan-to-Deposit Target via thisdaylive
With two weeks to the September 30 deadline given by the Central Bank of Nigeria for commercial banks to maintain a minimum Loan-to-Deposit Ratio of 60 per cent, the financial institutions have launched an aggressive deposit drive to meet the target, findings by THISDAY have shown.
In their moves to achieve the target, some banks’ recently released half-year results showed that most of them recorded improved customer deposits. For instance, while GTBank’s customer deposits increased by 6.3 per cent to N2.418 trillion, from N2.274 trillion as of December 2018; Access Bank’s customer deposits increased significantly by 63 per cent to N4.18 trillion in June 2019, from N2.57 trillion in December 2018 and the United Bank for Africa Plc recorded 4.
“By my calculation, if the banks that are below 60 per cent LDR decide to grant loan, over N1 trillion would be channelled into the system; you can imagine what would happen if we have over N1 trillion in the system. A Director and Group Head, Investment Banking at Coronation Merchant Bank Limited, Mr. Abiodun Sanusi, said the overall impact of the LDR policy was that banks would be willing to give out more loans.
“Growing three per cent by the end of September, for most banks, they would get really close while some would go over it. So, I think the CBN is being measured in its approach.
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