SUMMARY OF FIVE BANKS FX GAINS REPORT FOR H1
Key Findings:
1. Overall Forex Gains:
- Total Forex Gains for H1 2024: ₦67.89 billion
- Comparison with H1 2023: A 67.89% decrease from ₦211.42 billion
2. Bank-Specific Forex Gains:
- FCMB Group:
- H1 2024 Gains: ₦35.19 billion
- H1 2023 Gains: ₦50.99 billion
- Ecobank Transnational Incorporated (ETI):
- H1 2024 Gains: ₦21.07 billion
- H1 2023 Gains: ₦156.28 billion
- Wema Bank:
- H1 2024 Gains: ₦6.20 billion
- H1 2023 Gains: ₦623.02 million
- Sterling Financial Holding Company:
- H1 2024 Gains: ₦5.34 billion
- H1 2023 Gains: ₦3.63 billion
- Jaiz Bank:
- H1 2024 Gains: ₦73.89 million
- H1 2023 Loss: ₦110.31 million
3. Impact of Policy Changes:
- Proposed Windfall Tax:
- The Federal Government proposed a 70% windfall tax on forex gains.
- The tax is retroactive, affecting 2023 profits and potentially extending to 2025.
- Reactions:
- FBN Holdings: Reported a forex revaluation loss of ₦80.85 billion, improved from ₦192.57 billion loss in the previous year.
- Femi Otedola (Chairman of FBN Holdings): Supported the windfall tax but criticized excessive bank spending on private jets.
- Tony Elumelu (Chairman of UBA): Supported the tax, emphasizing its role in addressing poverty and ensuring balanced prosperity.
4. Economic Context:
- Naira Exchange Rate Movement:
- Naira devaluation from ₦756.24/$ in June 2023 to ₦1,488.21/$ in June 2024.
- Effects of CBN Policies:
- Increased naira volatility due to a liberalized forex management system.
Key Findings:
1. Overall Forex Gains:
- Total Forex Gains for H1 2024: ₦67.89 billion
- Comparison with H1 2023: A 67.89% decrease from ₦211.42 billion
2. Bank-Specific Forex Gains:
- FCMB Group:
- H1 2024 Gains: ₦35.19 billion
- H1 2023 Gains: ₦50.99 billion
- Ecobank Transnational Incorporated (ETI):
- H1 2024 Gains: ₦21.07 billion
- H1 2023 Gains: ₦156.28 billion
- Wema Bank:
- H1 2024 Gains: ₦6.20 billion
- H1 2023 Gains: ₦623.02 million
- Sterling Financial Holding Company:
- H1 2024 Gains: ₦5.34 billion
- H1 2023 Gains: ₦3.63 billion
- Jaiz Bank:
- H1 2024 Gains: ₦73.89 million
- H1 2023 Loss: ₦110.31 million
3. Impact of Policy Changes:
- Proposed Windfall Tax:
- The Federal Government proposed a 70% windfall tax on forex gains.
- The tax is retroactive, affecting 2023 profits and potentially extending to 2025.
- Reactions:
- FBN Holdings: Reported a forex revaluation loss of ₦80.85 billion, improved from ₦192.57 billion loss in the previous year.
- Femi Otedola (Chairman of FBN Holdings): Supported the windfall tax but criticized excessive bank spending on private jets.
- Tony Elumelu (Chairman of UBA): Supported the tax, emphasizing its role in addressing poverty and ensuring balanced prosperity.
4. Economic Context:
- Naira Exchange Rate Movement:
- Naira devaluation from ₦756.24/$ in June 2023 to ₦1,488.21/$ in June 2024.
- Effects of CBN Policies:
- Increased naira volatility due to a liberalized forex management system.