Banks’ Deposits with CBN Soar 1,578% to ₦53.5 Trillion Amid Excess Liquidity
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Banks’ Deposits with CBN Soar 1,578% to ₦53.5 Trillion Amid Excess Liquidity |
Banks in Nigeria have significantly increased their deposits with the Central Bank of Nigeria (CBN), reaching ₦53.5 trillion in the first five months of 2025—a sharp 1,578% rise from ₦3.19 trillion recorded during the same period in 2024. This surge highlights growing excess liquidity in the banking system.
The CBN manages liquidity through lending and deposit mechanisms, including:
Standing Lending Facility (SLF): Banks borrow at an interest rate of MPR + 500 basis points.
Repo Lending: CBN buys securities from banks with an agreement to sell back later.
Standing Deposit Facility (SDF): Banks deposit excess funds and earn interest at MPR - 100 basis points.
Key Figures:
Q1 2025 Deposits: ₦19.22 trillion (up 956% YoY)
April 2025 Deposits: ₦16.75 trillion (up 3,793% YoY)
May 2025 Deposits: ₦17.55 trillion (up 1,761% YoY)
SLF Borrowing (5M 2025): ₦57.98 trillion (up 6.8% YoY)
SLF Borrowing Q1 2025: ₦50.46 trillion (up 61% YoY)
April Borrowing: ₦4.5 trillion (down 170% YoY)
May Borrowing: ₦2.02 trillion (down 81% YoY)
The increased deposits reflect the CBN’s single-tier SDF remuneration policy, which offers a 26.5% return (based on a 27.5% MPR). This high return makes the SDF an attractive option for banks, especially amid limited lending opportunities in the real sector.
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