Nigeria’s biggest banks made a lot of money from forex changes, totaling N3.37 trillion in 2023 and early 2024.
The government, led by President Tinubu, plans to tax these big earnings.
This information comes from Nairalytics, which studies money matters. They looked at the banks’ financial reports from 2023 and early 2024.
Nairalytics found that banks made N2.4 trillion in 2023 and N883 billion in early 2024.
The banks include Access Holdings, FCMB, Fidelity, GTCO, Stanbic IBTC, UBA, and Zenith Bank. They did not count banks not listed on the Nigerian Stock Exchange.
Some of these earnings are not real money yet; they are just on paper, so the government can’t tax all of it.
Here’s a look at how much money each bank made from these forex changes.
Big Earnings from Forex Changes
Banks made money because the Nigerian naira lost a lot of its value when the central bank changed how they handle forex. This made banks with lots of forex assets look very profitable on paper. Oil and gas companies and businesses earning dollars also did well.
But, manufacturing and other important sectors had a hard time. Their costs went up because importing materials and equipment became more expensive. This made it hard for them to make money and some had to lay off workers or shut down.
Consumers felt the pinch too, with prices for goods and services going up, making life more expensive.
The forex changes helped some but showed how weak the economy can be when it relies heavily on imports.
Forex Earnings Breakdown by Banks
First City Monument Bank (FCMB) – N116.443 billion Forex Gains
FCMB made N116.443 billion from forex changes in 2023 and early 2024.
- In 2023, they made N86.307 billion, a huge increase from the previous year.
- In early 2024, they made N30.137 billion, about 30% of their 2023 earnings.
- Their strong earnings boosted their cash flow and made investors happy.
United Bank for Africa – N682.952 billion Forex Gains
UBA did not say if their forex gains were real money or just on paper. In early 2024, they made N23.695 billion.
- In 2023, they made N659.257 billion, a big increase from the previous year.
- The big drop in early 2024 might mean their earlier gains were not actually turned into cash.
- Still, their profits were good, showing a strong performance.
Access Holdings – N748.159 billion Forex Gains
Access Holdings made N748.159 billion from forex changes in 2023 and early 2024.
- Their international operations and good currency management helped them profit from forex changes.
- Earnings in 2023 were high, but seemed to slow down in 2024.
Zenith Bank Plc – N828.675 billion Forex Gains
Zenith Bank made N828.675 billion from forex changes in 2023 and early 2024.
- In 2023, they made N638.982 billion and another N189.693 billion in early 2024.
- They also had high profits from other income sources.
GTCO – N844.450 billion Forex Gains
GTCO made the most, N844.450 billion, in 2023 and early 2024.
- This helped boost their profits a lot.
- In 2023, they made N345.070 billion from forex changes.
- In early 2024, they made N499.380 billion.
- These gains helped them make a lot of money before taxes.
Other Banks
Fidelity Bank and Stanbic IBTC also made forex gains of N71.143 billion and N24.569 billion.
These gains helped their profits, adding to earnings from other sources.
Windfall Taxes
The government plans to introduce a one-time windfall tax on the forex profits banks made in 2023.
- This tax will help fund infrastructure, education, healthcare, and welfare projects.
- While good for the economy, the tax will reduce banks’ profits, affecting shareholders.
- Banks will need to adjust their strategies to handle the financial impact and keep investors happy.