Godwin Emefiele
The CBN governor, Mr. Godwin Emefiele

BANKS’ FOREX REPORTING​

Obinna Chima

Bank returns on the utilisation of foreign exchange bought by commercial banks from the Central Bank of Nigeria (CBN) last week have shown that Zenith Bank Plc with $23,006,130.65 reported the highest amount of forex purchased for its customers.

The central bank had stated that the publications were meant to improve transparency in the allocation of forex to the banks, adding that it was agreed that banks would be publishing their returns weekly.

Zenith Bank displaced First Bank of Nigeria Limited (FirstBank) with an allocation of $19,592,883.79. FirstBank the week before posted the highest returns on utilisation of forex bought from the CBN.

FirstBank was followed by Stanbic IBTC Limited with $18,233,471.82, while Diamond Bank Plc with $15,014,943 came in fourth.

Standard Chartered Bank, Nigeria, reported returns of $13,822,206 to occupy the fifth position, Access Bank Plc reported returns of $13,811,929.15 to occupy the sixth position, just as Guaranty Trust Bank Plc (GTBank) reported returns of $13,628,377.70 to occupy the seventh place, while Ecobank Nigeria Limited reported returns of $10,014,449.67.

Also, while Citibank reported returns of $8,727,660.51, Sterling Bank Plc published returns of $8,516,484.73, Union Bank of Nigeria Plc — $8,031,320.09, United Bank for Africa (UBA) Plc – $7,808,531.06 and Fidelity Bank – $6,639,431.81.

For the third week in a row since banks started publishing the returns, invisibles such as school fess and business and personal travel allowances, in terms of volumes, accounted for the highest number of forex allocations, while other invisibles such as repatriation of capital, divestment by foreign portfolio investors from the equities and bond markets accounted for a large chunk of forex purchases, in terms of value.

However, top bank officials explained to THISDAY that the returns were not in any way reflective of total demand by the banks on behalf of their customers, saying that what the central bank was trying to address were the backlog of forex demand.

“On average, our returns or allocations are just about 10 per cent of total demand, which means that the CBN is unable to meet forex demand on the official market.

“It is for this reason there is so much pressure on the parallel market, where businesses that are unable to get their forex requirements met through the official window turn to,” a bank CEO explained.

For Zenith Bank, its returns on utilisation of forex bought from the CBN showed that the bank sold $23,006,130.65 it was allocated to 345 customers. Of this, payment for school fees abroad got the highest allocation in terms of volume, but it also sold dollars to some of its corporate customers for visible items such as the importation of raw materials, among others.

With respect to FirstBank, of the 741 customers on its list, only 11 accounted for visible items, while the rest was allotted to tuition fees.

Stanbic IBTC returns, on the other hand, reflected a large number of divestments by foreign portfolio investors comprising Brown Brothers Harriman/Stanbic Nominees, HSBC Funds Services London, JPM (JP Morgan) London, JPM Securities, Northern Trust London, State Street/Stanbic Nominees, Credit Suisse International, and the Bank of New York.

Forty-seven of the bank’s transactions out of 126, were for divestment purposes. Others went to raw materials, machinery importation and other visibles.

In the same vein, Diamond Bank sold forex to 253 customers. Of the total, 174 bought forex for school fees, 25 for PTA, while the rest went to the importation of visible items.

For Standard Chartered Bank Nigeria Limited, of the 251 customers in its returns, the bank sold dollars to 137 to pay school fees. Also, like other banks, it sold dollars for the importation of visible items such as electronic materials, petroleum products and industrial spare parts, among others.

Similarly, Access Bank sold dollars to 187 of its customers, but while 143 of the bank’s customers got forex for PTA and school fees abroad, 47 of them were allocated forex for the importation of visible items.

In contrast, Citibank Nigeria dealt mostly with multinationals. It sold forex to 59 customers including Procter and Gamble Nigeria, Unilever Nigeria, Nestle Nigeria, Emirates Airlines and Friesland Campini (WAMCO).