Five Banks Earn N67bn From FX In The First Half Of The Year

Five Banks Earn N67bn From FX In The First Half Of The Year....KINDLY READ THE FULL STORY HERE▶

Five banks have reported a combined foreign exchange (FX) gain of N67.89bn for the first half of 2024, according to an analysis of their interim reports by The PUNCH. This figure represents a 67.89% decline compared to the N211.42bn recorded in the same period of 2023……… CONTINUE READING

The banks involved include FCMB Group, Ecobank Transnational Incorporated, Wema Bank, Sterling Financial Holding Company, and Jaiz Bank. Each institution’s forex gains for the period reflect significant fluctuations due to changes in foreign exchange management and market conditions.

FCMB Group reported unrealized forex gains of N35.19bn, down from N50.99bn in the previous year. The bank attributed this decrease to the Central Bank of Nigeria’s more flexible FX management system, which led to a notable depreciation of the naira against the US dollar.

Ecobank Transnational Incorporated (ETI) recorded forex translation gains of N21.07bn, a drop from N156.28bn in June 2023. Wema Bank saw its forex revaluation income increase to N6.20bn, up from N623.02m the previous year but still below the N13.60bn earned in full-year 2023.

Sterling HoldCo reported a forex revaluation gain of N5.34bn, down from N13.63bn in the previous year. Jaiz Bank’s forex revaluation gain reached N73.89m, recovering from a loss of N110.31m in 2023.

In contrast, FBN Holdings experienced a forex revaluation loss of N80.85bn, which is an improvement from the N192.57bn loss in the same period last year.

Recently, President Bola Tinubu proposed a one-time 50% windfall tax on substantial FX gains reported by banks in 2023, part of an amendment to the 2023 Finance Act. This proposal aims to fund infrastructure, education, and healthcare projects under his Renewed Hope Agenda. The Senate has since increased the tax to 70%, applicable to FX gains from the naira’s devaluation until the end of the 2025 financial year.

While some analysts and Moody’s Investors Service have expressed concerns about the tax’s impact on the banking sector, FBN Holdings Chairman Femi Otedola supports the measure, aligning it with efforts to enhance financial sector stability. Otedola criticized the extravagant spending on private jets by banks, which he believes undermines public trust and diverts resources from essential areas like operational efficiency and customer service.

Tony Elumelu, Chairman of United Bank for Africa, also expressed support for the windfall tax, emphasizing its potential to address poverty while ensuring that businesses and the economy continue to thrive.

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