Top Nigerian bank nets half a billion dollars as naira plunges
Guaranty Trust Holding Co. reported a $468 million gain from its foreign-exchange holdings, helping Nigeria’s biggest lender by market value post a record profit.
The firm, which operates Guaranty Trust Bank, reported 357.5 billion naira ($468 million) in foreign-exchange gains for the six months to June 30, according to a regulatory filing. That’s after revaluing its overseas assets following the naira’s 40% depreciation and helping more than triple profit to 278.5 billion naira.
Nigeria allowed the naira to weaken in mid-June as part of measures to attract overseas inflows and help revive the struggling economy. The weakness in the naira — among Africa’s worst performing currencies — has helped banks with overseas assets, while manufacturers have reported losses because they have foreign-currency loans.
“Across the banking sector, most of them have a net positive foreign currency position,” said Muyiwa Oni, an analyst at Stanbic IBTC Bank Plc. “The revaluation gain is a trend we should see in the industry.”
Guaranty Trust Holding rose 3.5% in Lagos, heading of the biggest gain since July 21.
Flour Mills of Nigeria Plc, the West African nation’s biggest miller, reported its first loss in about four years this week after marking its overseas loans into naira. Six of the nation’s biggest companies announced a combined loss of $385 million after revaluing their overseas loans and letters of credit.
