 amid a devaluation of the local currency in 2020.){kind=link}
Access Bank, Nigeria’s largest lender by assets made hefty profits from trading foreign exchange (FX) in the third quarter (Q3) amid a devaluation of the local currency in 2020.
The bank made N42.81 billion on derivatives instruments relating to gains on forward, swap and future contracts entered into by the Group.
“These transactions also resulted in a short position on the foreign currency financial position which is inclusive in the unrealized foreign exchange loss on revaluation,” Access Bank said as part of statements released with its Q3 results.
Access Bank reported FX trading gains of N63.98 billion in the period and unrealised losses of N51.34 billion, leading to net FX gains of N12.63 billion.
Access Bank reported 2020 nine months’ after-tax profits of N102.3 billion, largely as a result of a 2,433 percent surge in net gains on financial instruments to N84.1 billion, from N3.3 billion in the earlier 2019 period.
The naira has been under pressure in 2020 as the coronavirus pandemic hit oil prices leading to a devaluation of the currency by the Central Bank of Nigeria (CBN).
Manufacturers and other real sector users of foreign currency have been hit hard by the devaluation of the currency this year.
Access Bank has however benefited as it was clearly on the right side of this FX trade, according to its latest results.