In a financial stability report published on its website on Thursday, October 17th, the apex bank revealed that in less than 30-day period analysis, seven Nigerian banks were not adequately funded, while in the 31-90 day bucket, nine banks had funding gaps.
Overall the cumulative position for the industry showed an excess of N4.8 trillion assets over liabilities, CBN said in a report seen by Business Insider SSA.
The banking regulator did not mention the names of the seven of the banks.
Stress test conducted by CBN explained
Here, a stress test is used to test the resilience of financial institutions against any future situations. It is done to help check the level of a bank's assets, as well as evaluate internal processes and controls.
Other highlights of the report:
- Baseline capital adequacy ratio (CAR) for the banking industry at end-December 2018 was 15.26%, indicating a 3.18% points increase from the 12.08% recorded at end-June 2018.
- The baseline banking industry NPL ratio was 11.64% at end-December 2018, showing a slight improvement of 0.81% points from 12.45% recorded at end-June 2018.
- The stress test result revealed that after a one-day run scenario, the liquidity ratio for the industry declined to 34.69% from the 51.87% pre-shock position and to 17.55 and 13.48% after a 5-day and cumulative 30-day scenarios, respectively.
- The result also revealed that under 5-day and cumulative 30-day run scenarios on the banking industry, liquidity shortfalls declined to N1.58 trillion and N1.98 trillion respectively.
