The Central Bank of Nigeria (CBN) reported a notable improvement in the banking sector’s Capital Adequacy Ratio (CAR), which increased to 14.01% in the third quarter (Q3) of 2024, up from 12.52% in the second quarter (Q2) of 2024.
According to the bank’s Q3 economic report, this represents a 1.49 percentage point rise, underscoring the banking sector’s enhanced resilience and stability amidst prevailing economic challenges.
The report noted that the development reflected the improvement of the banks’ total qualifying capital and decrease of risk weighted assets.
“The ratio remained above the 10.0% benchmark for banks with national/regional authorisation, but below the 15.0% threshold for banks with international authorization”, it said.
However, the report revealed that the banks’ asset quality measured by the ratio of non-performing loans (NPL ratio) weakened by 0.68 percentage point to 4.58 per cent, relative to 3.90 per cent at the end-June 2024.
“The ratio, however, remained below the prudential benchmark of 5.0 per cent. The industry Liquidity Ratio (LR) grew by 2.47 percentage points to 46.06 per cent, relative to the 43.59 per cent in the preceding quarter.”
