ZENITH Bank has significantly reduced its currency swap exposure with the Central Bank of Nigeria (CBN), trimming it from around $1.6 billion in 2024 to under $1 billion.
A currency swap is a derivative contract where two parties exchange financial instruments—typically cash flows—based on fluctuating variables like interest rates or commodity prices over a set period.
“As of 2024, our exposure stood at $1.6 billion. This has now dropped to below $1 billion,” said Dame (Dr.) Adaora Umeoji, Group Managing Director/CEO of Zenith Bank Plc, during a recent investor call discussing the bank’s full-year 2024 performance. “Maturities have been reinvested into other high-yield instruments to diversify our portfolio.”
These currency swaps help the CBN access dollar liquidity while allowing Zenith Bank to generate returns. As of December 31, 2024, Zenith Bank had ongoing swap deals with various parties. The contracts entitle the bank to receive $810 million at different maturity dates while obligating it to deliver the equivalent in Naira-denominated treasury bills.
The CBN’s strengthened financial position is reflected in its Net Foreign Exchange Reserves (NFER), which rose sharply to $23.11 billion at the end of 2024—the highest level in over three years. This marks a significant jump from $3.99 billion in 2023 and $8.19 billion in 2022. The increase suggests the CBN has been unwinding some of its swap obligations, including those with Zenith Bank.
In a strategic move, Zenith Bank has also paused its transition to a Holding Company (HoldCo) structure.
“After receiving shareholder approval, we began seeking regulatory clearance. However, with the CBN launching a recapitalisation drive, we realised pursuing HoldCo at this time could delay that process,” Umeoji explained. “We’ve decided to focus on raising capital, especially as our peers are already gearing up.”
Looking ahead, the bank is turning its attention to global market expansion and optimal use of its new capital. “If the need arises, we’ll revisit the HoldCo structure,” Umeoji added. “But for now, our priority is growing our market share.”
READ ALSO:
THE palace of the Owa Obokun Adimula and paramount ruler of Ijesaland has announced a…
Infidelity is fast becoming the norm rather than the exception in this generation. It’s so…
DEATH does have its unmistakeable sting. How else can we explain the inevitable shock even…
Today, we gather to mourn and celebrate the homegoing of Pa Ayo Adebanjo. I say…
Dr. Tunji Alausa is at it again. He has brought to mind the notorious fact…
For our every-last-Saturday-of-the-month “Diaspora Dialogues” podcast on April 26 on the topic “Kyari Out, Ojulari…
This website uses cookies.