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Naira devaluation, CBN’s interest hikes triple banks profits by 263%

Naira devaluation, CBN’s interest hikes triple banks profits by 263%...Continue The Full Reading.

Naira devaluation and Central Bank of Nigeria’s interest rate hikes tripled the earnings of some of Nigeria’s biggest banks in the first quarter of 2024 despite economic hardship.

This development marks a turnaround when the naira devaluation led to huge foreign exchange gains for the banks and boosted their fortunes.

This is according to the analysis of eight Nigerian banks’ latest financial statements.

Analysis of Zenith Bank Plc, United Bank for Africa (UBA) Plc, Access Holdings Plc, FCMB Group Plc, Stanbic IBTC Holdings Plc, Fidelity Plc, Guaranty Trust Holding Company (GTCO) Plc and Wema Bank Plc showed that their combined after-tax profit rose by 264.5 per cent to N1.13 trillion in Q1 from N308.7 billion in the same period last year.

GTCO, Zenith, and FCMB led in profit compared to the five other banks.

The banks’ total interest income was N2.40 trillion in Q1, up from N977.4 billion while loans and customer advances grew by 108.7 per cent to N1298.1 trillion from N617.6 billion.

Analysts attributed the hike in commercial bank earnings to the growth in interest income, which was driven by effective asset repricing in response to the elevated interest rate environment.

Similarly, the Naira devaluation in January 2024, which caused the currency to depreciate to N1,455 from N907.1 per dollar, positively impacted the profit of commercial banks, financial analysts disclosed.

The naira devaluation led to foreign exchange gains for the banks and boosted their fortunes.

This development comes as the CBN’s Monetary Policy Committee tightened interest rates from 18.75 per cent to 24.75 per cent in Q1 2024....Continue The Full Reading.>’.

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