Commercial banks are increasingly shifting their focus away from time deposits, to attracting low cost deposits from customers since the reduction in treasury bills yields, a report has stated.
This, according to the report is to enable them manage margin declines from the fall in Treasury bill yields. London-based Exotix Capital stated this in a report on Nigerian banks, after its analysts visited Lagos, where they met with six banks. The report was titled: Notes from the field: Reasons to Be Positive. It explained that treasury yields have generally been declining in response to the Central Bank of Nigerias (CBN) less aggressive stance on liquidity tightening.
For some banks, mix shifts (e.g. moving from large loans to smaller balances) could be a positive support for asset yields. The cost of funds is likely to fall in the second quarter (Q2) of 2018 as some of the expensive wholesale funding that the banks took on in October/November 2017 matures. In addition, the cost of customer deposits has declined as current/savings account deposit collection has improved. Improving cost of funds is a key management objective for several of the banks. Retail savers are being aggressively targeted to help achieve this goal.
(ThisDay)
No comments:
Post a Comment