CBN Receives Record N37 Trillion Deposits as Banks Avoid Lending to Real Sector

• In 2025, Nigerian banks and merchant banks importantly accrued their deposits with the CBN, totalling N37.05 trillion successful the archetypal 4 months, up 1549% year-over-year.
• This surge successful deposits comes arsenic banks debar lending to the existent assemblage owed to rising inflation, insecurity, and debased productivity, with galore opting to parkland funds successful the CBN’s Standing Deposit Facility.
• Analysts property this displacement to liquidity challenges, hazard absorption strategies, and a precocious involvement complaint offered by the CBN, further amplified by planetary involvement complaint hikes and economical uncertainties

Legit.ng writer Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

In effect to the increasing menace to Nigeria's business situation from proviso concatenation issues, inflation, debased purchasing power, insecurity, and debased productivity, banks and merchant banks person avoided lending to the existent sector.

Bank deposits person steadily accrued arsenic involvement complaint and ostentation uncertainty person grown. Photo Credit: Contributor
Source: Getty Images

Instead, their deposits with the Central Bank of Nigeria (CBN) grew to N17.83 trillion successful April 2025, a notable 243% summation from N5.2 trillion successful March 2025.

According to CBN fiscal data, banks and merchant banks deposited N37.05 trillion with the cardinal slope successful the archetypal 4 months of 2025, expanding 1549% year-over-year (YoY) from N2.25 trillion successful the aforesaid play successful 2024.

The apex bank's Standing Deposit Facility (SDF) statistic shows that since the twelvemonth began, slope deposits person steadily accrued arsenic involvement complaint and ostentation uncertainty person grown.

The SDF is simply a little corridor of the Monetary Policy Rate (MPR) wherever discount stores and Deposit Money Banks (DMBs) tin deposit wealth with the CBN for an involvement complaint implicit night.

Another avenue for DMBs and discount stores to get wealth from the CBN is the Standing Lending Facility (SLF), an precocious corridor monetary argumentation complaint that usually consists of the benchmark argumentation complaint positive a margin.

According to THISDAY findings, DMBs borrowed much wealth wide successful the archetypal 4 months of 2025 than they deposited with the CBN.

The full magnitude borrowed during the play nether reappraisal was N54.96 trillion, portion the full magnitude deposited was N37.05 trillion. According to a THISDAY investigation of the fiscal data, the largest magnitude that banks and merchant banks deposited with CBN was N17.83 trillion successful April 2025.

Analysts react

The summation successful slope deposits with CBN was ascribed by analysts to a fig of factors, including accrued insecurity and concern situation uncertainties.

“The astir important origin is the expanding level of menace successful the situation of concern successful Nigeria, arising from: insecurity, proviso concatenation problems, rising inflation and mediocre purchasing power, debased level of productivity, rising unemployment, liquidity overhang and paucity of risk-free fiscal instruments,” said Investment Banker & Stockbroker, Tajudeen Olayinka,“As a result, astir banks similar to beryllium debited by CBN for moving abbreviated of LDR limit, arsenic against extending recognition to businesses that are uncovering it hard to survive. It is each astir managing risk.”

DMBs borrowed much wealth wide successful the archetypal 4 months of 2025 than they deposited with the CBN. Photo Credit: Contributor
Source: Getty Images

Speaking, the Vice President, Highcap Securities, David Adnori said banks and merchant banks successful the archetypal 4 months were maintaining effectual hazard absorption successful a determination to chopped down NPL.

He added,

“banks and merchant banks with an expanding deposit from customers similar to lend to CBN alternatively than their customers to support NPL beneath 5 per cent threshold.”

CBN slashes exigency loans to FG amid expanding indebtedness concern

Legit.ng reported that successful a motion of tightening monetary and fiscal policy, the Central Bank of Nigeria (CBN) reduced its Ways and Means advances to the national authorities by 59%.

The cardinal slope provides the national authorities with Ways and Means Advances—a signifier of exigency loan—when revenues autumn short. According to the CBN’s 2024 fiscal statement, released implicit the weekend, these short-term loans totalled N7.94 trillion by the extremity of 2023.

However, that magnitude fell to N3.27 trillion successful 2024, marking a diminution of N4.68 trillion oregon 58.9%.

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Source: Legit.ng