23 Aug 2023
CBN's Robust N103.8 Billion Profits in 2022 Amid Naira's Challenges
The Central Bank of Nigeria (CBN) showcased impressive resilience in adverse economic conditions, amassing N103.8 billion in profits by the end of 2022, despite the Naira's depreciation. This notable growth in profitability marked a significant leap from the previous year and was driven by key factors contributing to the bank's success. These insights emerged with the release of the long-awaited audited accounts of the apex bank for 2022. The accounts revealed post-tax profits of N103.8 billion, a substantial increase from the N75.1 billion recorded the previous year.
The report, authorized by Godwin Emefiele and audited by EY and KPMG, also included audited results spanning 2016 to 2021, accessible on the central bank's official website. These results underscore the CBN's consistent ability to generate profits over the last eight years, navigating currency fluctuations, intervention fund disbursements, and government loans among other financial activities.
For the profit Generation Strategies, the Key to the CBN's profit surge is its adept utilization of revenue generation strategies. The bank's audited financials highlighted its effective combination of increased interest income, fees, and commissions. A significant highlight is the bank's remarkable 80% rise in net interest income, soaring to N1.8 trillion from N1 trillion in the prior year. This upswing can be attributed to astute management of its loan portfolio and interest-bearing assets.
Some of the lucrative "Ways and Means" Approach are when An important contributor to the CBN's revenue stream is its involvement in the "Ways and Means" provision, extending loans and overdrafts to the federal government, resulting in substantial interest income. Despite scrutiny over the size of these loans and their compliance with the central bank act, the N23 trillion loans generated N1.9 trillion in interest income, surpassing the previous year's N1.2 trillion.
For diverse Income Streams, diverse income sources further bolstered the CBN's financial success. Additional earnings flowed from various avenues, including N247 billion from AMCON and N156 billion from FGN Securities. Additionally, the bank garnered substantial income of N422.7 billion from debt instruments measured at fair value through profit and loss (FVTL), showcasing prudent investment practices.
In the area of Foreign Exchange Transactions Yield Returns, the Foreign exchange activities significantly contributed to the CBN's profitability, with N104.5 billion income from foreign currency sales commissions and other related activities. An extra N15.9 billion stemmed from currency processing, Bureau de Change applications, fund transfers, and fees from financial institutions, highlighting the bank's adept forex-related endeavors.
The Central Bank of Nigeria (CBN) managed expenses, including foreign exchange revaluation losses and rebate expenses related to the RT 200 and Naira4Dollar policy. Despite income growth, the bank reported substantial credit losses of N875.2 billion, doubling from the previous year's N498.2 billion. The bank's balance sheet grew significantly, with N125 billion in "other operating expenses" related to national security, the federal government, and security agencies.