We suffer no CRR debit for LDR non-compliance — Stanbic-IBTC
Stannic IBTC Plc has refuted the story that it was sanctioned by the Central Bank of Nigeria (CBN) for its non-compliance with the regulatory Loan-to Deposit Ratio (LDR) of 65 per cent.
In a rejoinder issued by the bank, it stated that it has remained compliant with the CBN’s daily minimum Loan-to-Deposit Ratio (LDR) requirement of 65 per cent, “with a 2020 financial year daily LDR average of 65.84 per cent and 2021 YTD daily average of 69.86 per cent.”
It added that it did not suffer Cash Reserve Requirement (CRR ) debits by the CBN for non-compliance with the regulatory LDR directive over the period.
Last Thursday, it was reported that the apex bank slammed the bank with N488 billion debits over the period of nine months for its failure to meet the 65 per cent LDR. But reacting to the story, the bank issued a statement to put the record straight.
The statement read: “In its circular, BSD/DIR/GEN/LAB/12/070, to banks dated January 07, 2020 on the regulatory measures to improve lending to the real sector of the Nigerian economy, the Central Bank of Nigeria (CBN) directed banks to maintain a minimum 65 per cent Loan to Deposit Ratio (LDR) with a further requirement that an average daily 65 per cent LDR compliance be maintained by banks.
“Since the issuance of the regulatory directive and in line with its key strategic objective of driving economic growth in Nigeria, Stanbic IBTC Bank has increasingly focused on the growth of its credit exposures to the real sector of the economy.
“The focus and concerted efforts of the Bank’s 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 risk asset portfolio for Stanbic IBTC Bank over the last two years.
“The loan book increased by 18 per cent from FY 2019 position of N556.4billion to N655.3billion as at 31 December 2020. The Bank also recorded an increased loan growth by 30 per cent from the 31 December 2020 position to a gross risk asset position of N854.9billion recorded as at 30 September 2021.
“It is important to note that the risk asset growth of 18 per cent and 30 per cent recorded by the bank in 2020 financial year and as at Q3:2021 remain significantly higher than the industry average growth of 18 per cent and 8 per cent in FY 2020 and as at Q3:2021, respectively.
“Consequent upon the significant growth recorded in the bank’s risk asset growth in 2020 and YTD 2021, the bank has remained compliant with the CBN’s daily minimum LDR requirement of 65 per cent with a FY 2020 daily LDR average of 65.84 percent and 2021 YTD daily average of 69.86 per cent. It is important to note that the bank suffered no CRR debits by the CBN for non-compliance with the regulatory LDR directive over the period.
“For good record, it is also noted that the growth in the bank’s Cash Reserve Requirement (CRR) position from N369 billion as at 31 December 2020 to N462.6 billion as at 30 September 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 sterilise 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 N462.6billion and 60.09 percent respectively as at 30 September 2021.”
