Economy
Customers’ Rush for Treasury Bills Worries Banks
By ThisDay
Nigerian banks are currently finding it extremely difficult to mobilise deposits from institutional investors such as Pension Fund Administrators (PFAs) and insurance companies as well as individuals due to the attractive treasury bills yields.
The increasing awareness of the opportunities in the treasury bills market is seeing a lot of banks lose deposits to fixed income investments.
This is because most investors and bank customers now benchmark interest rates on term deposit against treasury bill rates.
THISDAY findings showed that those affected most are the Tier 2 banks as they are finding it difficult to meet the demand of the fund holders.
But the Tier 1 banks are not under such pressure, THISDAY learnt.
The cash squeeze in the market clearly manifested in the interbank lending rate which increased to 23 percent on Friday from five per cent the preceding Friday.
The Nigerian Treasury Bill currently offers a unique investment opportunity to investors. It offers security and guaranteed premium returns to its investors.
Last week, the 364-day instrument offered by the Central Bank of Nigeria (CBN) recorded excess subscription to the tune of N91.1 billion, whilst the CBN allotted N136.5 billion at a stop rate of 18.5 per cent relative to the offered amount of N120 billion.
The 91-day (offer amount: N29.1 billion; subscription: N26.1 billion) and 182-day (offer amount: N80 billion; subscription: N69.75 billion) instruments were however undersubscribed, whilst the CBN allotted N23.2 billion and N69.57 billion at stop rates of 13.4 per cent and 17.4 per cent respectively.
An analyst at Ecobank, Mr Kunle Ezun, who confirmed the situation in the money market, said the banks are feeling the brunt now.
“A lot of the PFAs, insurance companies and individuals are not willing to do term deposit again. They prefer doing treasury bills.
“If they do term deposit, they get around seven per cent interest. But they can get as high as 18 per cent from treasury bills. A lot of the banks today are losing deposits because of this.
“What the PFAs are saying is that if you cannot match treasury bills, bring back my money. Individuals are also saying: if you can’t give what treasury bills will give me, I am not going to save money with you.
“If banks don’t have deposits, they can’t give loans. The few banks that are ready to match treasury bills rates are doing that at a cost,” Mr Ezun said.
The Chief Finance Officer, Wema Bank Plc, Mr Tunde Mabanwoku, also confirmed the challenge currently faced by the Tier 2 banks.
Mr Mabanwoku explained: “What we see now is that customers are increasingly benchmarking treasury bills rates. So, when customers come in that they want to do fixed deposits and you tell them its 12 per cent, they would be comparing what you tell them with treasury bill rates.
“So, customers are becoming a lot more aware of what is happening out there and they are saying if they can put their money in treasury bills at 17 per cent, why should they put their money in a bank at 12 per cent.
“So, banks have had to increase their cost of deposits just to match or get close to the sovereign rate.”
Also, the Managing Director, Afrinvest Securities Limited, Mr Ayodeji Ebo, disclosed that owing to the opportunities in the treasury bills segment, foreign exchange speculators who had converted their naira to the dollar are now re-converting the greenback, back to naira in order to invest in fixed income securities.
He said those that doubted the ability of the central bank to sustain its intervention are now convinced that the banking sector regulator has enough ammunition to sustain its foray in the market.
He said: “People have been observing the development in the forex market. We have observed for over four months, the CBN has continued to emphasise that they would continue to intervene.
“In addition to that, despite the frequent intervention by the CBN, the reserves have also not been depleting. So, that has boosted confidence.
“Also, if you look at the volume of transactions in the investors and exporters’ window, that has also increased and we have seen banks now re-introduce their naira cards for dollar transactions.
“So, those people that were trying to take arbitrage opportunities, especially those that entered when the dollar was as low as N400-N500, are trying to cut their losses by investing in risk-free investments like treasury bills. Luckily for them, the interest rate is also very high.”
Nigeria’s external reserves stood at $30.927 billion as at August 3.
By Adedapo Adesanya
The Naira lost 33 Kobo or 0.02 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, May 14, to trade at N1,370.89/$1 compared to the preceding day’s N1,370.56/$1.
However, the local currency further appreciated against the Pound Sterling in the official FX market during the session by N1.61 to close at N1,851.38/£1 versus N1,852.99/£1, and improved its value against the Euro by N2.21 to trade at N1,602.98/€1 versus Wednesday’s closing price of N1,605.19/€1.
Also, at the GTBank forex counter, the Nigerian currency gained N1 against the Dollar yesterday to sell for N1,381/$1 compared with midweek’s rate of N1,383/$1, and at the black market, it closed flat at N1,385/$1.
Data from the Central Bank of Nigeria (CBN) indicated that interbank FX turnover fell to $78.783 million across 103 deals from $130.549 million the previous day.
The Naira is forecast to be broadly stable, supported by dollar sales by the central bank and steady, higher oil receipts, with the market settling into a balance.
As of May 12, 2026, the country’s external reserves increased by $150 million or 0.2 per cent to $48.48 billion from $48.33 billion on May 5, 2026, providing support for the domestic currency.
In the cryptocurrency market, major digital coins closed mixed amid broader macroeconomic selling pressure.
Also, the US Senate Banking Committee approved the bipartisan Clarity Act, a key step toward comprehensive crypto market structure legislation that now heads toward a merger with a similar Agriculture Committee bill.
Investors bet that clearer US rules, including the Clarity Act’s separation of payment stablecoins from investment assets, will ease regulatory overhangs on its use case.
On the geopolitical scene, President Trump said the US does not need to reopen the Strait of Hormuz, changing an earlier stance and deepening concerns about elevated energy costs feeding into inflation.
Ripple (XRP) grew by 1.8 per cent to $1.46, Binance Coin (BNB) jumped 1.0 per cent to $676.37, Bitcoin (BTC) improved by 0.7 per cent to $80,371.72, and TRON (TRX) gained 0.6 per cent to sell at $0.3529.
But Dogecoin (DOGE) slid by 1.3 per cent to $0.1134, Ethereum (ETH) depreciated by 0.9 per cent to $2,247.38, Solana (SOL) went down by 0.7 per cent to $90.65, and Cardano (ADA) weakened by 0.1 per cent to $0.2656, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited gave up 0.10 per cent on Thursday on the back of profit-taking in most of the main sectors of the market.
Data from Customs Street showed that the insurance counter closed in green after it chalked up 0.46 per cent. This was not enough to offset the losses recorded by the others.
Business Post reports that the selling pressure witnessed yesterday contracted the banking space by 0.92 per cent, crashed the consumer goods segment by 0.13 per cent, battered the industrial goods index by 0.03 per cent, and depleted the energy counter by 0.02 per cent.
As a result, the market capitalisation retreated by N170 billion to N161.669 trillion from N161.839 trillion, and the All-Share Index (ASI) moderated by 265.08 points to 252,243.11 points from 252,508.19 points.
Despite the poor outcome, investor sentiment remained strong. The market breadth index was positive during the session after the bourse finished with 37 price gainers and 29 price losers.
Zichis eased by 9.99 per cent to N32.69, FTN Cocoa lost 9.87 per cent to trade at N9.95, Meyer depreciated by 9.83 per cent to N21.55, RT Briscoe shrank by 9.41 per cent to N15.40, and Neimeth contracted by 7.44 per cent to N9.95.
On the flip side, Learn Africa gained 10.00 per cent to sell for N9.90, Fidson appreciated by 9.97 per cent to N124.60, Austin Laz grew by 9.95 per cent to N4.09, Berger Paints rose by 9.92 per cent to N154.00, and Deap Capital increased by 9.90 per cent to N5.77.
Yesterday, market participants transacted 1.0 billion equities valued at N41.6 billion in 74,822 deals versus the 1.9 billion equities worth N118.1 billion traded in 76,557 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 47.37 per cent, 6.48 per cent, and 2.27 per cent, respectively.
Chams exchanged 127.9 million shares for N501.2 million, VFD Group sld 10.7.1 million stocks worth N1.2 billion, First Holdco posted a turnover of 75.6 million equities valued at N5.4 billion, Access Holdings traded 50.3 million stocks worth N1.3 billion, and UBA transacted 44.9 million shares for N2.0 billion.
By Adedapo Adesanya
Crude oil marginally appreciated on Thursday after it was reported that about 30 vessels had crossed the Strait of Hormuz, with Brent crude oil futures gaining 9 cents or 0.09 per cent to trade at $105.72 a barrel, and the US West Texas Intermediate (WTI) futures expanding by 15 cents or 0.15 per cent to $101.17 a barrel.
Iranian state media reported that about 30 Chinese vessels were allowed safe passage by Iran through the Strait, which has been largely shut since the Iran war broke out at the end of February.
Before the report, a Chinese supertanker carrying 2 million barrels of Iraqi crude sailed through the contested waterway on Wednesday after being stranded in the Gulf for more than two months, while a Panama-flagged crude oil tanker managed by Japanese refining group Eneos had also passed.
Bloomberg also reported that the vessels were allowed to pass the Strait of Hormuz with the coordination of the Iranian authorities and Islamic Revolutionary Guard Corps’ navy, however, it added that it is yet unknown or unclear whether the US Navy side of the de facto blockade will also let them pass.
The move also follows formal requests by China’s foreign minister as well as its ambassador to Iran, with Iran reportedly agreeing based on safeguarding the two allies’ strategic partnership.
It also comes as President Donald Trump’s ongoing state visit to China, where he and President Xi Jinping agreed that the Strait of Hormuz must be open for the free flow of energy.
President Xi expressed interest in purchasing more US oil to reduce China’s dependence on the Strait of Hormuz, according to the White House. China, the world’s largest oil importer, is not a big buyer of US crude and has not imported any since May 2025 due to a 20 per cent import tariff imposed during the trade war.
Iran, a member of the Organisation of the Petroleum Exporting Countries (OPEC), also appears to have tightened control over the strait, cutting deals with Iraq and Pakistan to ship oil and liquefied natural gas from the region.
The International Monetary Fund (IMF) said the global economy is clearly moving into a middle “adverse scenario,” which would see global real GDP growth falling to 2.5 per cent this year from 3.4 per cent growth in 2025, citing the Iran war as the cause.
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