Economy
Survey Reveals Increase in Credit in Q3
The third quarter (Q3) 2016 “Credit Conditions Survey Report” has revealed increase in secured and unsecured credit availability to households, small businesses and corporate entities, compared with the previous quarter.
The report by the Central Bank of Nigeria (CBN) also showed that spread on overall secured and unsecured lending to households widened in Q3, 2016 and was expected to remain widened in the next quarter.
It stated that lenders also reported that households’ demand for house purchase lending, unsecured credit card lending and unsecured overdraft/personal loans all increased in Q3, 2016 and were expected to increase in the next quarter.
According to the report, the demand for corporate lending in Q3, 2016 increased across all firm sizes and was expected to increase further in the next quarter. Corporate loans performance to all businesses deteriorated in Q3, 2016.
In addition, the report showed that in Q3 2016 relative to the previous quarter, lenders reported an increase in the availability of secured credit to households.
“Lenders noted that brighter economic outlook and changing appetite for risk were major factors behind the increase. The availability of secured credit was however expected to decrease in the next quarter with the banks’ “market share objectives” as the major contributory factor.
“Due to lenders stance on tightening the credit scoring criteria in Q3 2016 there was a decline in the proportion of loan applications approved in the quarter. Though lenders expect the credit scoring criteria to remain tightened in the next quarter, they expect the proportion of households’ loan applications approved in Q4 2016 to increase.
“Maximum Loan to Value (LTV) ratios remained flat in the current and next quarter.
Lenders expressed their unwillingness to lend at low LTV ratios (75% or less) in both the current and next quarters. Similarly, they expressed unwillingness to lend at high LTV (more than 75%) in the current quarter and the next quarter (Question 10). The average credit quality on new secured lending improved in Q3 2016 and was expected to improve further in Q4 2016.
“Lenders reported that the overall spreads on secured lending rates to households relative to MPR widened in Q3 2016 and was expected to further widen in the next quarter. Widened spreads were reported for prime, buy to let and other lending in Q3 2016 and were expected to widen further in the next quarter,” it added.
Households demand for lending for house purchase increased in Q3 2016 and was expected to further increase in the next quarter. Of the total demand, increase in households demand for prime, buy to let and other lending were reported, but were expected to decrease in the next quarter except demand for prime lending.
Households demand for consumer loans, mortgage/remortgaging and small businesses rose in Q3 2016 and were expected to rise further in Q4 2016. Secured loan performance, as measured by default rates worsened in Q3 2016 and but was expected to improve in Q4 2016. Loss given default deteriorated in the current quarter but was expected to improve in the next quarter.
Also, the availability of unsecured credit provided to households rose in the current quarter and was expected to further rise in the next quarter. Lenders reported increased appetite for risk and banks’ market share objectives as factors that contributed to the increase in Q3 2016.
Due to Lenders’ resolve to tighten the credit scoring criteria for total unsecured loan applications in Q3 2016, the proportion of approved total loan applications for households decreased in the quarter. Lenders expect to loosen the credit scoring criteria in the next quarter, but are still of the opinion that the total loans applications to be approved in Q4 2016 will further decrease.
Similarly, lenders tightened the credit scoring criteria for granting credit card loan applications and expect the proportion of approved credit card applications to decrease in Q4 2016.
Lenders resolve to tighten the credit scoring criteria in granting overdraft/personal loan applications in the current quarter decreased the proportion of approved household’s overdraft/personal loan applications in the current quarter.
Lenders reported that spreads on credit card lending widened in Q3 2016 and was expected to widen further in the next quarter. Similarly, it revealed that spreads on unsecured overdrafts/personal loans on approved new loan applications widened in the current quarter and was expected to widen further in the next quarter.
http://www.thisdaylive.com/index.php/2016/09/28/survey-reveals-increase-in-credit-in-third-quarter/
By Adedapo Adesanya
FrieslandCampina Wamco Nigeria Plc led two others to evict the bears from the NASD Over-the-Counter (OTC) Securities Exchange on Wednesday, July 8.
According to data, the unlisted securities exchange rebounded by 6.84 per cent during the session, thanks to the gains recorded by FrieslandCampina, Food Concepts Plc, and Geo-Fluids Plc.
During the trading day, FrieslandCampina recouped N12.57 to trade at N151.98 per unit versus Tuesday’s closing price of N139.41 per unit, Food Concepts Plc improved by 25 Kobo to N2.76 per share from N2.51 per share, and Geo-Fluids Plc expanded by 18 Kobo to N2.55 per unit from N2.37 per unit.
As a result of these accumulations, the market capitalisation added N163.34 billion to close at N2.551 trillion compared with the preceding session’s N2.387 trillion, and the NASD Security Index (NSI) increased by 272.13 points to 4,250.20 points from 3,978.07 points.
The midweek trading data showed that the volume of securities dipped by 50.9 per cent to 158,933 units from 323,780 units, and the value of securities slipped by 31.9 per cent to N10.9 million from the preceding session’s N15.9 million, while the number of deals increased by 6.9 per cent to 31 deals from the previous session’s 29 deals.
When trading activities on the platform ended for the day, Great Nigeria Insurance (GNI) Plc was the most active stock by value on a year-to-date basis, with 3.4 billion units traded for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 70.7 million units transacted for N4.9 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units exchanged for N415.7 million.
By Adedapo Adesanya
It was a bad day for the Nigerian Naira in the different segments of the foreign exchange (FX) market on Wednesday, July 8, as its value further slipped against the United States Dollar.
In the black market window, it lost N5 against the US Dollar during the session to trade at N1,400/$1 compared with Tuesday’s closing rate of N1,395/$1, but closed flat at the GTBank forex counter at N1,381/$1.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX), the domestic currency depreciated against the greenback yesterday by N3.32 or 0.24 per cent to N1,379.07/$1, in contrast to the previous day’s N1,375.75/$1.
But the Naira appreciated against the Pound Sterling in the official market at midweek by 93 Kobo to 1,840.64/£1 from N1,841.57/£1, and gained N1.31 on the Euro to sell at N1,561.38/€1 compared with Tuesday’s N1,562.69/€1.
The market was liquidity-heavy, but increased demand for foreign payments dragged the exchange rate at the official window,
Traders reported that interbank FX turnover spiked by about 399 per cent on the day to $208.094 million, from $41.736 million the previous day. Also, the number of deals in the interbank market increased sharply to 150 from 47 deals.
FX analysts maintained positive expectations on the Naira outlook in the second half of 2026 despite the absence of interventions from the Central Bank of Nigeria (CBN) to support liquidity.
As for the cryptocurrency market, prices rose as Bitcoin (BTC) held above $62,000, chalking up 0.3 per cent to sell at $$62,754.96, after the US military completed another round of strikes against Iran and both sides raised the prospect of closing the Strait of Hormuz.
The escalation reignited inflation concerns and pulled forward rate expectations. Markets are increasingly treating war-related shocks as interest-rate events, with BTC now tracking front-end Treasury yields more closely than traditional hedges like crude or gold.
Dogecoin (DOGE) improved its value by 1.2 per cent to $0.0728, Binance Coin (BNB) soared by 1.1 per cent to $573.56, Ripple (XRP) appreciated by 0.9 per cent to $1.09, TRON (TRX) expanded by 0.6 per cent to $0.3309, Solana (SOL) grew by 0.2 per cent to $78.34 and Ethereum (ETH) jumped by 0.1 per cent to $1,751.22.
However, Cardano (ADA) decreased by 0.1 per cent to $0.1690, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
By Dipo Olowookere
The bullish run seen lately in the Nigerian equities market continued on Wednesday after it closed the session with a 2.27 per cent growth.
This was influenced by renewed interest in domestic stocks by investors, who are locking funds in some shares with sound fundamentals like Airtel Africa, Aradel Holdings, Dangote Cement, and others.
Data showed that Airtel Africa and Trans-Nationwide Express gained 10.00 per cent to sell for N5,801.40 and N2.97, respectively. Fidelity Bank appreciated by 9.97 per cent to N19.85, Thomas Wyatt advanced by 9.89 per cent to N3.00, and UPDC REIT improved by 9.47 per cent to N10.40.
Conversely, Haldane McCall lost 9.95 per cent to trade at N3.53, McNichols declined by 8.89 per cent to N6.15, Transcorp slid by 5.65 per cent to N40.05, CWG went down by 5.24 per cent to N19.00, and VFD Group crashed by 5.19 per cent to N28.12.
The market breadth index remained positive after the Nigerian Exchange (NGX) Limited ended the day with 32 appreciating stocks and 24 depreciating stocks, indicating strong investor sentiment.
Business Post reports that the insurance sector was under pressure yesterday, resulting in a 0.20 per cent loss, which did not affect the outcome of the market.
The energy space gained 3.85 per cent, the industrial goods segment chalked up 1.89 per cent, the banking index rose by 1.07 per cent, and the consumer goods counter soared by 0.31 per cent.
As a result, the All-Share Index (ASI) added 5,378.70 points to finish at 242,459.98 points compared with the previous day’s 237,083.28 points, and the market capitalisation went up by N3.450 trillion to N155.586 trillion from N152.136 trillion.
The busiest equity during the trading session was Lasaco Assurance, with a turnover of 56.6 million units valued at N104.8 million. Fidelity Bank traded 47.5 million units worth N911.9 million, Linkage Assurance transacted 33.9 million units for N51.2 million, Zenith Bank sold 32.0 million units valued at N3.4 billion, and Sterling Holdings exchanged 30.5 million units worth N233.3 million.
At the close of transactions, 518.4 million shares worth N22.8 billion exchanged hands in 48,495 deals versus the 493.7 million shares valued at N28.0 billion traded in 49,969 deals a day earlier. This implied that the trading volume was up by 5.00 per cent, the trading value was down by 18.57 per cent, and the number of deals decreased by 2.95 per cent.
