By Munachimso Obienyi
Twelve Nigerian banks listed at the floor of the Nigerian Exchange Limited (NGX) paid a total sum of N62.41 billion to the Nigerian Deposit Insurance Corporation (NDIC) as deposit insurance premium in the first six months (H1) of 2022.
This represents a 15.4 per cent increase compared to N54.07 billion recorded in the corresponding period of 2021. This is according to the 2022 half year report of some of the banks’ quoted on the NGX.
Deposit-taking banks pay deposit insurance premiums through premium assessments on their domestic deposits. Hence, the banks’ insurance premium spending is a function of the volume of their customer deposits and their perceived risks.
The NDIC is an independent agency of the Nigerian federal government, with the aim of protecting depositors and guaranteeing the settlement of insured funds when deposit-taking financial institutions can no longer repay their deposits, thereby helping to maintain financial system stability.
Also, the NDIC aims to protect the rights and interests of depositors, maintain credit order, and promote the sound development of the financial industry.
Meanwhile, the banks accumulated total customer deposits of N41.25 trillion as of the end of June 2022, representing an increase of N3.28 trillion from N37.97 trillion recorded at the beginning of the year.
Furthermore, the amount paid by the banks to the regulatory body represents 0.15 per cent of the aggregate customer deposits by the twelve banks. When annualized, the figure rises to about 0.3 per cent or 30 basis points as the NDIC charges banks between 30 to 50 basis points on their total demand deposits.
A further breakdown of the bank payments to the NDIC, showed that Access Bank paid the highest of N11.1 billion in the period under review, followed by Zenith Bank (N9.78 billion), while Jaiz Bank recorded the lowest payment of N446 million. Others include Stanbic IBTC, Sterling Bank, FCMB, Union Bank, Wema Bank, Fidelity Bank, GTCO, UBA and First Bank Plc.
