CBN’s Suspension Of FX Supply To BDCS Boosts Banks’ Income

Forex Crisis Appetite For Foreign Goods Killing Naira – CBN
Forex Crisis Appetite For Foreign Goods Killing Naira – CBN
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With Central Bank of Nigeria (CBN) suspending Foreign Exchange (FX) supply to Bureau De Changes (BDCs), a total of six banks in nine months of 2021 generated ₦145.6billion income from trading in FX.

The six banks in prior nine months of 2020 had generated a total of ₦47.16billion from trading in the FX market.

The six banks are Sterling bank Plc, Union Bank of Nigeria Plc, Wema Bank Plc, Guaranty trust Holding Company Plc (GTCO), Access bank Plc and United Bank for Africa Plc (UBA).

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For instance, Sterling Bank reported ₦4.75billion from FX trading in nine months of 2021 from ₦128million reported in nine months of 2020, while Wema Bank grew its FX trading income by 47 per cent to ₦207million in nine months of 2021 from N141 million in nine months of 2020.

The likes of Union Bank of Nigeria reported ₦3.44billion FX trading income in nine months of 2021, an increase of 51.05 per cent from ₦2.28billion reported in nine months of 2020.

Further checks by Newsmen revealed that Tier-1 banks benefitted tremendously from FX trading income in the period with Access bank reporting a net FX trading gain of N86.81billion in nine months of 2021, 587 per cent increase from ₦12.63billion reported in nine months of 2020.

United Bank of Africa reported 78.8 per cent increase in FX trading income to ₦35.56billion in nine months of 2021 from ₦19.88billion in nine months of 2020, while GTCO grew its FX trading gain to ₦14.88billion in nine months of 2021 from ₦12.10billion reported in nine months of 2020.

The Central Bank had in July this announced that it has ended the sales of FX to BDC operators, stating that the parallel market has become a conduit for illicit FX flows and graft.

The central bank had also announced that it will also no longer process applications for BDC licences in the country.

 

AFRICA DAILY NEWS, NEW YORK

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