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Stanbic IBTC Holdings Plc could be at the verge of reporting foreign exchange revaluation loss if the naira continues to depreciate against the dollar, according to a report by Chapel Hill Denham Limited.
Looking through the net FCY position of listed banks, the research house said that Stanbic stands out with a net foreign liability of N16.56 billion as at December 2022.
On June 14th, the Central Bank of Nigeria (CBN) announced the unification of all segments of the forex market collapsing all windows into one.
This was part of a series of immediate changes to operations in the Nigerian Foreign Exchange (FX) Market, in a bid to improve liquidity and stability.
The new policy brings to a vague or nebulous exchange regime of former president Muhamadu Buhari that stifled economic growth as all existing FX windows were collapsed segments into the Investors’ and Exporters (I and E) FX window.
This resulted in a 63 percent slump in the value of the Naira, as the regulator has allowed the market to freely determine the price of Nigeria’s currency, the Naira’s official and market rates have converged to close at N756.
The impact of a naira depreciation based on annualised first quarter (Q1)-23 earnings is most positive for First City Monument Bank (FCMB) (c.3.8x) and
FistBank of Nigeria Holdings, (FBNH) (2.4x), Guaranty Trust Holdings Company (GTCO) (1.8x) and Zenith (1.6X), according to Chapel Hill Denham Limited.
Of course, FBNH, GTCO and Zenith hold the largest net foreign assets.
It is a bull case as the equity market has rallied since the announcement of a market-friendly policy by president Bola Ahmed Tinubu.
Foreign investors and the International Monetary Fund (IMF) and the World Bank have given the new administration a standing ovation for the transformation policy like the removal of subsidy on Premium Motor Spirit (PMS) and the timely appointment of economic advisers.