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LequteMan
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According to a Bloomberg report, Nigerian banks may start losing money from the next quarter following the protracted forex issues in the country.
While other sectors have been hit by a substantial loss in income and profit, banks had been faring okay.
While mid-tier lenders Skye Bank Plc and Diamond Bank Plc made losses during the last quarter, the rest were profitable. Guaranty Trust Bank Plc made a net income of 42 billion naira, up 94 percent from a year earlier. Zenith Bank Plc also generated a profit of 55 billion naira.
It's believed that some of the banks benefited from the last naira devaluation because they had more dollar-denominated assets than liabilities, allowing them to book gains, said Ronak Gadhia, an equity analyst at London-based Exotix Partners LLP.
They may find the last part of the year tougher, especially if Nigeria continues to hold the naira, he added.
“I think we’ll see a weaker quarter for the banks,” he said. “It seems that after making positive moves on the currency in June, the central bank has gone back on that, so the revaluation gains probably won’t recur in the fourth quarter. Additionally, there may be a slight pickup in provisions” for bad debt, he said.
While other sectors have been hit by a substantial loss in income and profit, banks had been faring okay.
While mid-tier lenders Skye Bank Plc and Diamond Bank Plc made losses during the last quarter, the rest were profitable. Guaranty Trust Bank Plc made a net income of 42 billion naira, up 94 percent from a year earlier. Zenith Bank Plc also generated a profit of 55 billion naira.
It's believed that some of the banks benefited from the last naira devaluation because they had more dollar-denominated assets than liabilities, allowing them to book gains, said Ronak Gadhia, an equity analyst at London-based Exotix Partners LLP.
They may find the last part of the year tougher, especially if Nigeria continues to hold the naira, he added.
“I think we’ll see a weaker quarter for the banks,” he said. “It seems that after making positive moves on the currency in June, the central bank has gone back on that, so the revaluation gains probably won’t recur in the fourth quarter. Additionally, there may be a slight pickup in provisions” for bad debt, he said.
