Banks’ Deposit With Central Bank Of Nigeria Soars To N48.40trn

The Nigerian banking sector’s deposits with the Central Bank surged by 154 per cent, reaching N48.40 trillion in the second quarter of 2025.

Data from the CBN’s economic report for Q2 2025 showed that the sharp increase occurred as the Central Bank of Nigeria (CBN) intensified efforts to withdraw excess liquidity from the financial system through aggressive Open Market Operations and higher Cash Reserve Requirements.

Daily average liquidity in the banking sector fell to N0.16 trillion, down from N0.25 trillion in the first quarter, mainly driven by aggressive auctions of Open Market Operations (OMO) bills, Nigerian Treasury Bills (NTBs), Federal Government of Nigeria (FGN) bonds, and debits under the Cash Reserve Requirement (CRR).

The report revealed significant shifts at the CBN’s standing facilities, with the borrowing at the Standing Lending Facility (SLF) dropping by 83.92 per cent to N7.97 trillion. In comparison, deposits at the Standing Deposit Facility (SDF) soared 153.93 per cent to N48.40 trillion, reflecting a strategic repositioning by banks amid tighter liquidity conditions. Rates at these windows remained unchanged, with SLF charged at 32.50 per cent and SDF at 26.50 per cent.

OMO activity was particularly pronounced. The CBN offered N5.15 trillion in bills, with subscriptions reaching N9.23 trillion and allotments of N8.16 trillion, compared with Q1 figures of N2.30 trillion offered and N4.57 trillion allotted. Repayments of maturing CBN bills totalled N4.26 trillion, leaving a net liquidity withdrawal of N3.90 trillion from the system. NTBs and FGN bonds also recorded lower subscriptions and allotments compared with the previous quarter, contributing further to the tightening.

The liquidity squeeze led to money market rates edging slightly higher. The interbank call rate edged up to 27.55 per cent, the Open Repo (OPR) rose to 27.70 per cent, while the 30-day NIBOR increased to 27.33 per cent, although all rates remained within the CBN’s policy corridor. Lending and deposit rates, however, remained broadly stable, with the weighted average term deposit rate rising marginally to 9.93 per cent and the maximum lending rate declining slightly to 29.82 per cent.
Despite the tighter liquidity, consumer credit continued to expand, growing by 6.48 per cent to N4.27 trillion. Personal loans accounted for 54.10 per cent of total credit, increasing to N2.31 trillion, while retail loans rose 8.89 per cent to N1.96 trillion, buoyed by seasonal demand during the Salah festivities.

The report highlighted significant OMO activity during the review period. The total CBN bills offered, subscribed, and allotted amounted to N5.15 trillion, N9.23 trillion, and N8.16 trillion, respectively, across tenors ranging from 104 to 350 days. This contrasted with Q1 2025 figures, which showed N2.30 trillion offered, N8.25 trillion subscribed, and N4.57 trillion allotted, for tenors ranging from 347 to 364 days. Bid rates for the period averaged 23.32 per cent (±2.93), while stop rates averaged 23.68 per cent (±1.31). With N4.26 trillion of maturing CBN bills repaid during the quarter, the net liquidity withdrawal totalled N3.90 trillion.

Meanwhile, NTBs across 91-, 182-, and 364-day tenors saw total offerings, subscriptions, and allotments of N2.86 trillion, N7.47 trillion, and N2.97 trillio,n respectively, down from Q1 2025 levels of N5.12 trillion offered, N15.20 trillion subscribed, and N5.54 trillion allotted. The average stop rate for NTBs declined to 19.78 per cent (±3.15) from 21.81 per cent (±4.81) in the previous quarter.

FGN bonds, covering 5-, 7-, and 9-year tranches, also experienced a decline in activity. Total offerings, subscriptions, and allotments fell to N0.75 trillion, N1.54 trillion, and N0.80 trillion, respectively, compared with N1.10 trillion, N2.41 trillion, and N1.78 trillion in Q1 2025. The average bid and marginal rates moderated to 18.24 per cent (±3.24) and 18.87 per cent (±1.72), down from 22.00 per cent (±7.00) and 20.80 per cent (±1.80) recorded in the preceding quarter.