Union Financial institution of Nigeria Plc, United Financial institution for Africa Plc (UBA) and Entry Financial institution Plc noticed their overseas change good points rise to N140.1 billion within the 9 months ended September 2022, up 19 p.c from N117.6 billion in the identical interval of 2021.
A BusinessDay evaluation of the overseas change earnings information of 10 banks present that six of them recorded a year-on-year drop in overseas change earnings within the interval below evaluation whereas one posted a loss.
Union Financial institution’s overseas change earnings rose to N4.8 billion as of September, indicating a 41 p.c enhance from N3.4 billion within the corresponding interval of final 12 months.
UBA’s overseas change earnings elevated by 40.6 p.c to N38.4 billion from N27.3 billion.
Entry Financial institution recorded a overseas change earnings of N96.9 billion, up 11.6 p.c from N86.8 billion in the identical interval of 2021.
“Naira devaluation serves as a tailwind to banks as industrial banks have a tendency to achieve from buying and selling FX to their prospects. Contemplating the numerous hole between the official fee and the parallel market, people will resolve to purchase {dollars} from banks, due to this fact, resulting in the banks benefiting and recording larger good points on FX buying and selling,” Tesleemah Lateef, a banking analyst at Cordros Securities Restricted, stated.
The unfold between the parallel and official naira-dollar change fee has widened in current months amid the lingering shortage of the US forex in Nigeria. The naira weakened to as little as 890 per greenback early this month, in contrast with a mean of 440/$1 on the official market.
Learn additionally: Naira stabilises at N775 per greenback as provide rise
On the rationale for the depreciation of the naira, Lateef stated: “The primary challenge we see right here is the dynamic between the provision and demand of FX. Now we have seen a discount in Nigeria’s FX reserves because of the low provide ranges because the nation’s low crude oil manufacturing ranges and overseas portfolio buyers exiting the Nigerian market proceed to have an effect on the overseas change market.
“On the demand aspect, pressures have been on the reserve ranges as people proceed to demand to fulfill their FX wants.”
Industrial banks in Nigeria get overseas change from the central financial institution and promote to prospects who’ve legit wants.
“Banks can guide FX earnings by way of investments in FX devices, FX buying and selling, and FX revaluation. These examples usually are not exhaustive as banks produce other means to guide FX,” stated Ngozi Odum, monetary companies analyst at CardinalStone.
Constancy Financial institution Plc recorded a overseas change earnings of N2.4 billion from January to September this 12 months, a 75 p.c drop from N9.6 billion a 12 months earlier.
Sterling Financial institution Plc noticed its overseas change earnings dip to N1.5 billion, a 66 p.c drop from N4.5 billion within the comparable interval of 2021.
FBN Holdings Plc, the guardian firm of First Financial institution of Nigeria Restricted, recorded a 64 p.c decline in overseas change earnings to N2.1 billion from N5.9 billion within the interval reviewed.
Wema Financial institution Plc recorded a overseas change earnings of N123 million, down 40.5 p.c from N207 million in September 2021.
Warranty Belief Holding Firm Plc recorded N11.6 billion as overseas change earnings, which fell 25 p.c from N15.5 billion.
Stanbic IBTC Holdings noticed its overseas change earnings drop by 8.2 p.c to N16.8 billion from N18.3 billion.
Zenith Financial institution Plc recorded a overseas change lack of N11.1 billion as of September 2022, in comparison with N15.4 billion in the identical interval final 12 months.
