Connect with us

Business

CBN names UBA, Zenith, others as lead players in forex market

Published

on

Spread The News

By ODUNEWU SEGUN

AS part of the guidelines to allow the naira to float, the Central Bank of Nigeria has named some leading banks in the country as Foreign Exchange Primary Dealers, FXPD in the foreign exchange market, National Daily has gathered.

Investigations showed that only four banks- UBA, GTB, First Bank and Zenith Bank met all the conditions considering their audited financial positions as at the end of 2015 and first quarter of 2016.

The banks shareholders’ funds, liquidity ratios, volume of foreign currency assets, capital adequacy ratios and historical volume of bids recorded in the apex bank’s phased out weekly forex market regime were also considered.

National Daily gathered that four other banks- Access Bank, Diamond Bank, FCMB and Fidelity Bank, may have also qualified. Access Bank, GTB, First Bank, Zenith and UBA have been leading in volume of bids and allocation of foreign exchange from the CBN weekly foreign exchange trading since last year.

Industry observers believe that other banks expected to jostle for the ninth and tenth positions should CBN decide to move up the list, include Stanbic IBTC Bank Plc, Skye Bank Plc and Sterling Bank Plc, but their financial positions could not be ascertained due to non-availability of their financial reports as at end of 2015 and first quarter of 2016.

ALSO SEE: Zenith Bank suspends international transaction on naira card

Ecobank Nigeria is expected to make the top 10 but their financial reports were US dollar denominated and could not be immediately translated into Naira due to the transitional exchange rate as at today. While announcing the new foreign exchange regime last week, CBN had indicated a two-level trading structure where the apex bank would deal on wholesale basis with some banks that would in turn transact with other banks to be known as non-primary dealers, and other dealers at lower retail volume.

In this connection CBN stated: “To improve the dynamics of the market, the apex bank will introduce Foreign Exchange Primary Dealers (FXPD), who would be registered with the CBN to deal directly with the apex bank for large trade sizes on a two-way quotes basis “These primary dealers shall operate with other dealers in the inter-bank market, among other obligations that will be stipulated in the Foreign Exchange Primary Dealers (FXPD) Guidelines.

“There will be no predetermined spread on foreign exchange spot transactions executed through the CBN intervention with primary dealers, while all foreign exchange spot purchased by the authorized dealers are transferable in the inter-bank foreign exchange market.”

Trending