By Emeka Okoroanyanwu
The Nigeria Deposit Insurance Corporation, NDIC has passed a vote of confidence on Deposit Money Banks, DMBs in Nigeria saying “the overall condition of DMBs in 2018 was relatively sound”.
This was contained in the recently released NDIC 2018 Annual Report.
According to NDIC, “the analysis of the financial condition of the 26 DMBs’ as at 31st December 2018 based on Capital Adequacy, Asset Quality, Management, Earnings, Liquidity and sensitivity to market risk, revealed that the overall condition of DMBs in the year 2018 was relatively stable and sound in 2018. It recorded an increase in the average capital adequacy ratio from 10.23% in 2017 to 15.26%, liquidity ratio of 51.87% as against 45.56% recorded in 2017, an improvement in NPLs ratio from 14.84% in 2017 to 11.70% as well as improvement in earnings & profitability” the report stated.
NDIC further revealed that NDIC and the Central Bank of Nigeria, CBN conducted a Risk Asset Examination of the DMBs.
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During the year, the NDIC and CBN jointly conducted the Risk Assets Examination of 26 DMBs to assess the risk assets’ quality, review the adequacy of their loss provisions and risk-weighted capital ratios as a prerequisite for the approval of their 2017 annual reports by the CBN” the report stated.
NDIC, however, expresses its worry over the total sum of Insurance funds which stands at N1.206 trillion, a figure short of the NDIC Estimated Insurance Fund Risk Exposure of N3.32 trillion.
“The Deposit Insurance Fund (DIF) grew by 14.66% from N955.18 billion as at 31st December 2017 to N1, 095.23 billion as at 31st December 2018. The Special Insured Institutions Fund (SIIF) increased by 10.72% from ₦99.24 billion as at 31st December 2017 to ₦109.88 billion as at 31st December, 2018, while Non-Interest Deposit Insurance Fund (NIDIF) increased by 43.47% from N693.70 million as at 31st December, 2017 to N999.94 million as at 31st December, 2018. The Total Insurance Fund of N1.206 trillion fell short of the NDIC Estimated Insurance Fund Risk Exposure of N3.32 trillion as at 31st December 2018.