Despite efforts by the Central Bank of Nigeria (CBN) to discourage the use of dollars in domestic transactions and speculative trading on foreign exchange (Forex), fresh facts have emerged that Deposit Money Banks (DMBs) are making huge gains from trading in forex, payment of visa application fees and other activities.
Nigerian Tribune checks on the books of some banks revealed that some top and mid tier lenders were involved.
For instance, the first quarter (Q1) 2015 unaudited result of Unity Bank Plc shows that Foreign Exchange income increased by N768.76 billion from N184.36 billion recorded in 2014 to N953.10 billion, representing a huge 416.97 per cent increase.
The bank is not the only lender reaping fortunes from this avenue as United Bank for Africa’s (UBA) audited result for the year ended December 31, 2014 shows.
Net Trading & Foreign Exchange Income for UBA increased by 83.63 per cent to N32.411 billion from N17.650 billion in 2013.
Also, GTBank’s 2014 annual report shows that the group realised N18.557 billion from N8.784 billion in 2013 to N27.341 billion by December 2014.
A top executive of a new generation bank who preferred anonymity told Nigerian Tribune that transactions under this item also involves payment of certain fees like Visa application fee and not necessarily currency trading.
According to him, recent regulatory measures introduced by CBN had forced DMBs to look for other means of shoring up their revenue base because the measures are already having major negative effects on the banks.
“The banks are already feeling the effects of previous actions by the CBN, especially the increase in public sector Cash Reserve Requirement (CRR), the Asset Management Corporation of Nigeria’s levy increase, and the gradual removal of certain bank charges,” he added.