Nigeria sees most banks raising lending to meet new ratio

Bloomberg

Central Bank of Nigeria Governor Godwin Emefiele said most of the country’s banks have obeyed a directive to raise loan-to-deposit ratio to 60 percent and those that fail to do so will face penalties by October 1.
“Compliance level has been excellent,” Emefiele said in an interview with Bloomberg TV in London. “Not all the banks have complied, naturally. Sanctions will be administered by October 1.”
The central bank ordered banks to increase lending by late September in a bid to shore up an economy struggling to recover from a contraction in 2016, its first in a quarter of a century. The monetary authority wants to steer banks away from naira bonds, which offer hefty yields, and into consumer and corporate lending.
Some lenders have warned that extending more credit amid double-digit inflation could jeopardise the health of the banking system.
S&P Global Ratings warned last week that the directive is unlikely to unlock credit, unless the government addresses other structural bottlenecks to investment in Africa’s most populous country.