* Nigeria has set a minimum loan to deposit ratio of 65%

* Several banks missed the September deadline

* Intermediary lender FCMB says it has been drawn down $46m

*Central bank tries to boost lending to support growth (adds comment on bankers’ meeting with central bank)

LAGOS, Oct 3 (Reuters) – Nigeria’s central bank has levied a charge on 12 banks totaling more than 400 billion naira ($1.3 billion) for failing to increase lending to meet a regulatory target , three banking sources and one of the lenders told Reuters on Thursday.

The central bank in July asked lenders to maintain a lending ratio of at least 60% of deposits by September or face a higher cash reserve draw, as part of measures to circulate credit in Africa’s largest economy.

The cash reserve requirement in Nigeria is 22.5%. However, the regulator said banks that fail to meet its new minimum lending target will face a higher cash reserve requirement equal to 50% of the lending shortfall.

Central bank spokesman Isaac Okoroafor confirmed the levy on Thursday. The funds will go into the cash reserve requirement and will not be available to banks, the spokesperson said.

The central bank has sought to boost business and consumer credit in the wake of Nigeria’s recession, but lending has yet to pick up. With slow growth, banks prefer to put their cash in risk-free government securities rather than lending to businesses and consumers.

Nigeria’s economy is expected to recover in 2019, with gross domestic product growing at nearly 3%, up from 1.9% last year, according to the central bank.

Since the recession, lenders have done little to expand credit in Nigeria, blaming a weak economy after a 2014 oil price crash and a currency crisis that sent lending plummeting. Analysts fear that rapid credit growth will weaken asset quality and capital reserves.

The central bank said lending rose 5.3% in the three months to end-September, to N16.4 trillion, due to the new minimum requirement, and raised the ratio target to ready in what she called a move to keep the momentum going.


Lenders maintain a reserve account with the central bank to ensure that they do not run out of cash to meet depositors’ payment demands. The central bank also uses the cash reserve requirement to manage liquidity.

Bank chiefs met with the central bank in Abuja on Thursday and asked the regulator to review the amount charged resulting from the disparities on when the levy is expected to come into effect.

“We believe this development is broadly negative for the banking sector…the macroeconomic environment is still too fragile to support strong loan growth,” Cardinal Stone analysts said.

Local units of Citibank and Standard Chartered Bank are among those affected, the sources said.

“We are aware that there are vulnerable sectors that we will lend to,” said Mobola Faloye, chief risk officer at Standard Chartered Bank. She did not identify these sectors.

“It’s important that we mitigate our risk and have what we call a credit default clause that allows us to set off the defaulting party’s obligations against any other money the defaulting party has in the industry,” he said. she declared.

Other banks affected include top Nigerian lenders Zenith Bank, Guaranty Trust Bank, First Bank and United Bank for Africa, the sources said.

Intermediate lender FCMB said it had been drawn N14 billion. He added that he would improve loan growth by focusing on asset quality. The other banks declined to comment.

In recent months, the regulator has capped interest-bearing deposits at the central bank and banned banks from buying treasury bills for their own account at an open market auction, to boost lending. .

$1 = 306.40 naira Report by Chijioke Ohuocha; Additional reporting by Camillus Eboh in Abuja Editing by Mark Potter, Catherine Evans and Grant McCool