Forex harmonisation generates N1.7 trillion in earnings for Nigerian banks

In the first half of 2023, Nigerian commercial banks made large foreign exchange revaluation earnings, estimated at N1.7 trillion.

The information gathered from the 2023 half-year financial accounts made available by the banks revealed this.

Comparing the N1.7 trillion gain to the total gain of N66.559 billion in H1 2022, a considerable increase was seen.

The following financial institutions are lenders: Access Holdings, FBNH, FCMB, Fidelity, GTCO, Stanbic IBTC, Sterling Bank, UBA, Unity Bank, Wema Bank, and Zenith Bank.

Ecobank is left out because of its pan-African position, and Union Bank hasn’t yet published its half-year results.

Except for Unity Bank, which suffered a substantial FX revaluation loss of around N35.42 billion, the other banks all reported sizable FX revaluation gains.

The devaluation of the Naira, which reached N769.25/$1 in June 2023 as opposed to its 2022 closing rate of N461.50/$1, is to blame for the sharp increase in FX revaluation gains.

In a statement, Oliver Alawubam, Group Managing Director and Chief Executive Officer of UBA, said that the benefits were a result of Nigeria’s currency exchange rate becoming more consistent.

“While the Group had strong double-digit growth in its operating revenues and profits, the outcome also takes into account significant revaluation benefits brought on by the harmonisation of currency exchange rates in Nigeria.

“Our reporting currency found a new exchange level at about N756 to 1US$ as of June 30, 2023, compared to N465 at the beginning of the year,” he stated.