Nigerian Banks See Extraordinary Profit Surge Thanks to Forex Gains
Recent fluctuations in the Naira’s exchange rate have translated into extraordinary profits for Nigerian banks. According to financial reports from nine prominent banks listed on the Nigerian Exchange Limited (NGX), these institutions collectively achieved a staggering pre-tax profit of N2.292 trillion during the first nine months of 2023. Remarkably, a substantial portion of this profit, approximately 63.6%, totaling N1.457 trillion, stemmed from foreign exchange-related transactions.
This significant profit growth represents a remarkable transformation compared to the corresponding period in 2022 when these banks collectively earned a mere N225.416 billion from foreign exchange activities, indicating a remarkable 546.5% increase. The overall profit of N2.292 trillion demonstrates a remarkable 156.4% growth compared to the N897.717 billion recorded during the same period in the previous year (9M’22).
The nine banks reviewed by Financial Vanguard for their financial results include FBN Holdings, Zenith Bank, GTBank Group, UBA, Access Bank, Stanbic IBTC, Wema Bank, Sterling Bank Holdings, Fidelity Bank, and Jaiz Bank. Several other major banks are yet to disclose their financial figures, such as Ecobank Transnational Incorporation (ETI), Union Bank, Polaris Bank, FCMB, Citibank, Standard Chartered Bank, FSDH Merchant Bank, NOVA Merchant Bank, Heritage Bank, Keystone Bank, Providus Bank, among others.
In terms of comparative profit performance, the Tier-1 banks exhibited robust financial results in 9M’23. Zenith Bank led the pack with a profit of N505.0363 billion, closely followed by UBA with N502.091 billion. GTB secured the third spot with N433.203 billion in profit, while Access Bank posted N294.416 billion, and First Bank reported N270.333 billion in earnings.
The combined profits of Tier-1 banks accounted for a significant 87.5% of the total profitability among the nine banks during the period under review, with Tier-2 banks contributing the remaining 12.5%. Among the Tier-2 banks, Stanbic IBTC topped the list with a profit of N129.458 billion, followed by Fidelity Bank with N110.992 billion, Wema Bank with N22.117 billion, Sterling Bank with N17.803 billion, and Jaiz Bank with N6.679 billion.
Economic analysts anticipate that the combined profit of all banks, including those yet to release their financial results, will exceed N3.5 trillion when their reports become available.
