A leading Credit rating agency, Fitch Ratings, says that the proposed foreign currency gateway bank announced by the Central Bank of Nigeria may have a negative impact on the liquidity of Nigerian banks.
This was disclosed in the latest Fitch Ratings commentary on Nigerian banks.
OsunDailyNG recalls that on February 6, the apex bank Governor, Dr Olayemi Cardoso, unveiled plans to introduce a new foreign currency gateway bank to ease the country’s forex crisis.
However, Fitch Ratings believes the move will hurt Nigeria’s banking sector.
“The Governor of the CBN, Yemi Cardoso, also announced plans to establish an FC gateway bank to centralise correspondent banking activities while asserting that a recent audit has determined $2.4bn of overdue FX forwards invalid.
“Fitch believes these measures by the CBN may negatively affect the banking sector’s FC liquidity,” it said.
It added that with the local currency devaluation in Nigeria, banking sector-impaired loans are expected to increase faster than before the devaluation.
“Fitch expects the banking sector’s impaired loans (Stage 3 loans) ratio to increase at a faster pace than before the devaluation, which itself has caused already material FC-denominated problem loans (Stage 2 and Stage 3 loans; predominantly oil and gas sector loans) to have inflated relative to gross loans and core capital and accentuated credit concentration risks,” the credit rating firm said.
Naire closed at 899 per US dollar at the official market last year to N1,537.96 per US dollar on Friday, February 16 2024.
