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CBN allocates $921m to banks in one month

By on April 5, 2016
As the Central Bank of Nigeria (CBN) continues with its rationing of the greenback, bank returns on foreign exchange utilisation bought from the central bank and compiled by THISDAY have shown that it allocated $921,352,549 to 17 commercial banks in the country in March in order to meet the foreign exchange demand of their customers.
The computation, however, did not capture total returns of all commercial and merchant banks in country, as their reports were not made available to THISDAY.
It was sufficient, nonetheless, to show that actual demand for forex stood at almost $9.21 billion during the month, given that the CBN only manages to meet 10 per cent of banks’ demand for forex.
A top bank official 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 had explained.
Forex allocations in the month of March ranged from fuel, machinery and pharmaceuticals imports, all the way down to school fees and personal travelling allowances.
Allocations for the payment of tuition fees overseas were the most numerous items. Also, other invisibles such as business and personal travel allowances, repatriation of capital, and divestments by foreign portfolio investors from the equities and bond markets accounted for a large chunk of forex purchases, in terms of volume.
Based on THISDAY’s computation, Zenith Bank Plc got a total of $102,279,505 from the central bank, Guaranty Trust Bank Plc (GTBank) was allocated $102,565,144, Stanbic IBTC got $100,590,015, while Standard Chartered Bank of Nigeria got $69,088,105.
Also, in the month under review, while First City Monument Bank was allocated a total of $64,171,254; First Bank of Nigeria Limited – $79,428,530; Access Bank – $69,149,137; Diamond Bank Plc -$77,911,934; United Bank of Africa Plc (UBA) – $40,930,338 and Union Bank of Nigeria – $47,403,725.
Also, Ecobank Nigeria reported total returns of $44,205,507 in March, Citibank Nigeria Limited – $31,019,298, Fidelity Bank Plc – $42,236,367, Sterling Bank – $21,081,525, Skye Bank Plc – $6,585,134, Wema Bank Plc -$10,554,233 and Unity Bank Plc – $5,303,622.
Meanwhile, for the first time since THISDAY started reviewing weekly returns on forex utilisation, Diamond Bank recorded the highest allocation of foreign exchange from the CBN, last week’s returns published by the banks have shown.
Diamond Bank with an allotment of $20,084,368 for last week, was followed closely by Stanbic IBTC, which got $19,305,571 to come in second, while GTBank with $16,807,578 held the third slot.
Also, FCMB with $15,903,487 came in fourth last week, while Ecobank Limited which published returns of $15,352,404 occupied the fifth position.
FirstBank, on the other hand, reported returns of $14,903,487 to occupy the sixth place, just as Standard Chartered Bank with $14,629,570 held the seventh, while UBA with $13,551,412 was in the eight slot.
Access Bank with $12,432,960 returns on forex utilisation occupied the ninth position last week, Fidelity Bank came in tenth with $9,263,961.
Speaking in an interview with THISDAY, the chief executive officer of Rand Merchant Bank Nigeria Limited, Mr. Michael Larbie, said that the central bank has increased scrutiny on the allocation of forex.  This, he said, has also affected capital expenditure, as most firms in the country have put new projects on hold as they seek to get clarity on the country’s forex policy.
“But the situation is also opening opportunities for other clients. Specifically around our clients who source their raw materials locally, so we have challenges with some clients, but it has opened opportunities for other clients.
“Supermarkets are also refocusing where they source their products to the extent that those things that can be produced locally take priority over those that are imported,” he said.
[ThisDay]