See the top-earning banks in Nigeria on FX as FG moves to tax them

• About five Nigerian banks have reported about 67.89 billion in foreign exchange gains in six months
• The banks also reported that they lost varying amounts compared to the amount earned in the same period last year
• The banks include the FCMB Group, Ecobank Transnational Incorporated, Wema Bank, Sterling Financial Holding Company and Jaiz Bank.

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

Five Nigerian banks recorded about N67.89 billion in foreign exchange gains in the first half of 2024.

The banks’ interim financial results filed with the Nigerian Exchange Limited showed that forex gains recorded by the financial institutions in the first half of the year were 67.89% lower than the N211.42 billion in the same period in 2023.

Nigerian banks make huge FX gains as FG plans windfall tax Credit: Picture Alliance
Source: UGC

Top banks with FX gains

The financial institutions include the FCMB Group, Ecobank Transnational Incorporated, Wema Bank, Sterling Financial Holding Company and Jaiz Bank.

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Punch reports that FCMB recorded FX gains valued at N35.19 billion compared to the N50.99 billion recorded in the same period the year before.

Ecobank Transnational Corporation earned about N21.07 billion as FX gans, lower than the N156.28 billion recorded in the same period in 2023.

Wema Bank saw its FX earnings jump from N632.02 million in June 2023 to N6.20 billion.

Sterling Holdings gained about N5.34 billion, less than its N3.63 billion in June 2023.

One of Nigeria’s non-interest banks, Jaiz Bank, earned N73.89 million in FX revaluation loss after losing N110.31 million in 2023.

Meanwhile, FBN Holdings reported an FX revaluation loss of N80.85 billion, an improvement from the N192.57 billion loss recorded in the same period last year.

FG proposes tax on FX gains

Last month, President Bola Tinubu proposed a one-off 50% windfall tax targeted at the foreign exchange gains of the banks in 2023.

The President proposed the tax as part of the amendment to the 2023 Finance Act, seeking to earn more revenue for infrastructure and other developmental projects.

According to reports, the Nigerian Senate raised the windfall tax to 70% when the naira crashed till the 2025 financial year.

Bank chairpersons support FG’s plan

First Bank Chairman Femi Otedola said that the windfall tax aligns with ongoing reforms in the Nigerian banking industry to boost economic stability.

Otedola bemoaned the reckless spending of the banks’ FX earnings on private purchases and servicing by bank chiefs.

Also, the Chairman of the United Bank for Africa, Tony Elumelu, backed the windfall tax, saying that the policy would bring prosperity and create jobs for Nigerians.

Bank directors speak on windfall tax

Legit.ng earlier reported that the Bank Directors Association of Nigeria (BDAN), has opposed the views expressed by the Chairman of First Bank of Nigeria, Femi Otedola, and UBA chairman, Tony Elumelu, over the proposed windfall tax.

The directors stated that the views of the two billionaires in support of the federal government’s proposed taxing foreign exchange earnings represent their stance and not the banking community.

The National Assembly recently passed a bill to impose a ‘windfall tax’ on commercial banks that benefited from the Central Bank of Nigeria (CBN) subsidies on FX with stakeholders.

Source: Legit.ng