Vang fin 06062016

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JUNE 6, 2016

Seven banks earn N78bn from forex trading in 2015 Forex revaluation gain falls by 60% By BABAJIDE KOMOLAFE

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n spite of the scarcity and restrictions in the nation’s foreign exchange market, seven banks made N78 billion trading in foreign exchange in 2015. Financial Vanguard investigations revealed that the income was 8.3 per cent lower than the N85.5 billion recorded in 2014. The banks are Access, UBA, FBN Holdings, Union Bank, Diamond Bank, Wema Bank and Sterling Bank. Analysis of the audited financial statements of the banks showed that Access Bank and UBA accounted for 68 per cent of the total income with N53.8 billion, down from N67.2 billion recorded the previous year. Access Bank led the pack with N36.9 billion, up by 103 per cent or N18.7 billion from N18.2 billion in 2014. UBA came second, with N16.9

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Speaking on condition of billion down by N7.6 billion or 31 anonymity, a research analyst in one per cent from N24.5 billion in 2014. of the top banks told Financial FBN Holdings came third earning Vanguard that banks make money N11 billion in 2015, down by 20 per from foreign exchange either by cent or N14.1 billion in 2014. Others using the capital to buy and sell are Diamond Bank, N6 billion, foreign exchange Sterling Bank, N5 in the inter-bank billion, Union Bank market or by ,N2.1 billion and In 2014, the helping their Wema N0.2 billion. CBN was customers buy Analysis also foreign exchange revealed that of the reluctant to from the CBN. He five top banks, devalue the said that two Zenith recorded a naira, and factors occasioned loss of N1.96 billion resorted to the 8.3 per cent fall from foreign in the income exchange trading, defending the banks made from down by 113 per local currency foreign exchange cent from N14.1 by trying to trading last year. billion recorded in The first was the 2014. GTBank meet all various restrictions however did not demand for imposed by the disclose its foreign dollars CBN and general exchange trading scarcity of dollars for the year.

in the economy. The second factor was the decision of the apex bank not to defend the naira as it did for most part of 2014. “Remember that in 2014, the CBN was reluctant to devalue the naira, and resorted to defending the local currency by trying to meet all demand for dollars. This coupled with demand for dollars from foreign investors exiting the Nigerian economy, provided opportunity for banks to buy cheap from CBN and sell high to desperate end users, and as a result made good money,” he said. Income from forex revaluation falls by N32bn The decline in foreign exchange related income was however not limited to income from trading. Analysis of the results of top ten banks shows that total income from foreign Continues on page 18


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