The Central Bank of Nigeria (CBN) is to auction treasury bills worth N985.92 billion in the first quarter of this year.
The CBN stated this in its Nigerian Treasury Bills Issue programme for the first quarter of the year posted on its website yesterday.
According to the Apex Bank, 91-day bills worth N59.024 billion would be auctioned during the period, while for the 182-day bills, the CBN intends to issue a total of N248.842 billion.
Also, N678.059 billion worth of 364-day bills would also be sold by the CBN during the period.
The regulator usually auctions treasury bills twice a month to help the government finance its budget deficit and mop up excess liquidity in the system.
As part of measures to reduce the Federal Government’s borrowing costs, the CBN had at the beginning of last year commenced a slow down on treasury bills issuance.
However, commenting on the move, an international credit rating agency, Fitch Ratings, predicted that it would negatively impact banks’ profits in 2018.
Specifically, the rating agency said Tier 1 lenders such as Guaranty Trust Bank Plc, Zenith Bank Plc, Access Bank Plc, United Bank for Africa Plc, among others, might find it more difficult to sustain profitability due to the decline in net treasury bill issuance in the first quarter of 2018 issuance programme of the CBN. Still, it said the big banks will cope better than smaller lenders.
Fitch stated: “We expect falling T-bill yields and lower issuance to put pressure on Nigerian banks’ profitability in 2018. Performance metrics at all banks will be affected by weak demand for lending, falling T-bill yields, lower foreign-currency translation gains and rising loan impairment charges, but the largest banks are best placed to withstand these challenges.”