Cleared Cheques Decrease to N19.8 Trillion

The value of cleared cheques nationwide decreased by 11.2 per cent to N19.80 trillion in 2012, from N22.30 trillion in 2011.

Similarly, the volume of cleared cheques nationwide decreased by 1.3 to 37.24 million in 2012, from 37.72 million in 2011.

The Central Bank of Nigeria (CBN) revealed this in its 2012 annual report.

The central bank attributed the development to an increase in the use of e-payment channels in the country.

Also, the first 10 clearing zones in descending order by volume in the year under review were: Lagos, Abuja, Owerri, Benin, Awka, Ibadan, Port Harcourt, Abeokuta, Kaduna and Kano. On the other hand, in terms of the value of cheques cleared in 2012, the ranking (in descending order) was Lagos, Abuja, Kano, Benin, Port Harcourt, Awka, Abeokuta, Kaduna, Damaturu and Birnin Kebbi.

The Lagos clearing zone accounted for 78.8 per cent (by volume) and 73.4 per cent (by value) of the total cheque transactions in 2012. This was attributed to the fact that Lagos remained the economic and commercial centre of Nigeria.

Interbank Funds Transfer
According to the CBN report, the volume and value of interbank funds transfer, through the RTGS System which is the CBN Interbank Fund Transfer System (CIFTS), fell by 2.1 and 3.6 per cent to 482,791 and N113.009 trillion in 2012, respectively, compared to the 492,953 and N117.246 trillion recorded in 2011.

Use of e-Money Products
According to the report, the volume and value of electronic card (e-card) transactions increased from 355,252,401 and N1.671 trillion in 2011 to 382,616,953 and N2.096 trillion in 2012, reflecting an increase of 7.7 and 25.4 per cent, respectively. The increase was attributed to enhanced public confidence in electronic card payments.

Data on various e-payment channels for the period under review indicated that Automated Teller Machines (ATMs) remained the most patronised as it accounted for 98.1 per cent, followed by point-of-sale (PoS) terminals at 0.7 per cent. Web and mobile payments accounted for 0.6 per cent each. Similarly, in value terms, ATM accounted for 94.7 per cent, PoS 2.3 per cent, web and mobile payments, 1.5 per cent each. The volume and value of ATM transactions amounted to 375,487,756 and N1.985 trillion in 2012, respectively. These reflected an increase of 8.1 and 27.1 per cent over the volume and value of 347,569,999 and N1.562 trillion respectively in 2011.

The volume of mobile payments also decreased by 37 per cent to 2,297,688 in 2012, from 3,649,374 in 2011, while the value increased by 65.8 per cent to N31.50 billion in 2012, from N19.0 billion, in 2011.

Institutional Savings
Furthermore, the report showed that aggregate financial savings rose by N2.010 trillion or 29.3 per cent to N8. 868 trillion, compared to the N6.858 trillion it was at the end of December 2011.

“The ratio of financial savings to GDP was 21.9 per cent, compared with 18.8 per cent in 2011. The deposit money banks (DMBs) remained the dominant depository institutions within the financial system, accounting for 90.9 per cent of the total financial savings, compared with 95.2 per cent in the preceding year.

“Other savings institutions, namely, the primary mortgage banks, life insurance funds, the pension funds, the Nigerian Social Insurance Trust Fund, and microfinance banks accounted for the balance of 9.1 per cent,” it added.

Also, analysis of the structure of DMBs’ outstanding credit at end-December 2012 indicated that short-term maturities, as in the preceding year, remained dominant in the credit market.

Outstanding loans and advances maturing one year and below accounted for 59.6 per cent of the total, compared to 59.9 per cent at end-December 2011, while the medium-term (1 – 3 years) and long-term (3 years and above) accounted for 18.7 and 21.7 per cent, respectively, compared to 15.2 and 24.8 per cent, at end-December 2011.

In the same vein, the analysis of DMBs’ deposit liabilities showed a similar trend, with short-term deposits of below one-year maturity constituting 97.8 per cent of the total, the same as at end- December 2011.

“The share of deposits of less than 30-day maturity in total was 77 per cent, while long-term deposits of more than three years fell to 0.01 per cent at end-December 2012, compared with 0.09 per cent at end- December 2011. The structure of DMBs’ deposit liabilities explained their preference for short-term claims on the economy,” it added.

Outstanding Consumer Credit
Consumer credit improved during the year. Relative to the level as at the end of December 2011, outstanding DMBs’ consumer credit, at N623.6 billion, grew by 18.5 per cent at end-December 2012. At that level, consumer credit constituted 4.2 per cent of the total DMBs’ outstanding credit to the core private sector, slightly lower than the ratio of 4.4 per cent at the end of 2011.

The development also was attributed to the rising income level and enhanced confidence among consumers as well as a positive outlook of the Nigerian economy, especially the financial system.

Furthermore, the rising consumer credit implied greater financial inclusion, which had enhanced the effectiveness of monetary policy transmission in the economy.

“The depth of the financial sector, as measured by the ratio of M2 to GDP, stood at 37.3 per cent at end-December 2012, reflecting a slight improvement over the level (36.4 per cent) recorded at end-December 2011.

“Banking system financing of the economy, measured by the ratio of CP/GDP, stood at 37.7 per cent at end-December 2012, compared with 38.8 per cent at end-December 2011, indicating that the banking system showed a slightly weaker capacity to provide liquidity for the exchange of goods and services during the year.

“In addition, the intermediation efficiency indicator, measured by the ratio of currency outside bank to broad money supply, improved to 8.6 per cent at end-December 2012, from 9.4 per cent at end-December 2011, reflecting the improvement in the use of alternative modes of payment,” it further stated.

Money Market Review
Meanwhile, at the money market last week, the Nigerian Interbank Offered Rates (NIBOR) trended in opposite direction to the declining yields witnessed across various treasury instruments.

The NIBOR call rate was up by 39 basis points week-on-week as it closed at 10.58 per cent while the 3-month and 12-month NIBOR trended in like path with 168 basis points and 32 basis points increase to close at 13.16 per cent and 12.58 per cent.

Afrinvest Securities Limited, in a report at the weekend, anticipated a marginal retraction in the NIBOR this week, saying that it expected a more stable money market rates for the rest of the year.

Foreign Exchange Market
The naira continued on a losing trend last week as more demand pressure mounted on the green back. The nation’s currency declined by 1.2 per cent at the parallel market to trade at N167 to a dollar.

According to Afrinvest Securities, that took the official -- parallel markets spread to N11.95 as a result of the increased demand from importers. At the regulated Retail Dutch Auction System (RDAS), the central bank sold $799.542 million out of the $800 million it offered last week. The naira depreciated to N155.80 to a dollar at the RDAS.

Experts predicted that the naira would face more pressure as the Yuletide draws closer.

Bond Market
Yields on most short and long tenure bonds dipped a few basis points last week while prices ticked higher. Week-on-week, the average yield at the long end of the curve dipped by 40 basis points, according to the Afrinvest report. The 3-year and 10-year bonds (13.05 per cent FGN AUG 2016) and the (9.35 per cent FGN AUG 2017) eased the most (0.5 per cent, week-on-week to close at 12.4 per cent a piece.

“Sell side activities are likely to emerge in the coming week as bond holders take advantage of the higher prices,” Afrinvest added.

Source: ThisDayLive