Banks have not adopted a uniform exchange rate in reporting foreign currency assets in their financial statements, a Fitch Ratings report has said.
The banks’ action falls below the International Financial Reporting Standards (IFRS) which the lenders are expected to comply with. Many of the Tier-1 banks have released their 2017 full year results.
The IFRS guidelines state that companies operating in countries with multiple exchange rates should translate their foreign currency assets and liabilities into local currency based on the exchange rates at which they expect to settle them. But the guidelines leave room for considerable judgment and flexibility, and Nigeria operates with multiple exchange rates, which adds to the confusion.
The global rating agency said the need for uniform exchange rate reporting becomes exigent as exchange-rate risk warrants scrutiny for banks as about 40 per cent of assets and liabilities in Nigeria’s banking sector are denominated in dollars and not all banks operate with matched foreign currency positions.
Confirming the asset reporting gaps, Exotic Capital said foreign exchange measures implemented by the authorities appear to have worked. “We think we may see more lenders adjust the exchange rate used in reporting results. Such adjustments could impact capital and other metrics, but we think the banks are in a better position to deal with these adjustments now than some were before,” it said.
The research firm, said banks’ management teams appear as focused on changes in required provisions against specific exposures to the power sector and to companies, such as 9 Mobile, for instance, as they are on the overall impact of IFRS 9 implementation.
“Lenders expect regulatory risk reserves to help offset the impact of the transition to IFRS 9, at least in part. Provisions against loans to the power sector and against 9 Mobile exposures may rise at some banks. Having said this, most banks believe the worst is behind us and asset quality metrics may improve as the year progresses,” it said.
Continuing, Fitch said banks’ move to a more market-based presentation of dollar-currency assets, liabilities and profit-and-loss items is likely to come into focus as the lenders begin to publish their 2017 results.
Fitch said financial statements with foreign currency items translated more in line with market exchange rates will give a more realistic representation of banks’ foreign currency positions and capital at risk from potential further depreciation of the naira.
“Our discussions with banks that we rate suggest that most will publish their 2017 financial statements based on the Nigerian Foreign Exchange Fixing (NiFEX) rate (about NGN330/$) instead of the official exchange rate of NGN305/$, which they previously used. Some may use a blended rate. The NiFEX rate is the Central Bank of Nigeria’s (CBN’s) reference rate for spot foreign-exchange transactions, widely used on the interbank market,” it said.
HabariPay Limited, the fintech subsidiary of Guaranty Trust Holding Company Plc (“GTCO” or the “Group”), has unveiled its maiden HabariPay Impact Report 2025, providing stakeholders with a comprehensive account of the company’s evolution, innovation journey, business performance, and impact on the digital payments landscape.The report captures HabariPay’s transformation from a newly established fintech venture into one of Nigeria’s leading payment infrastructure providers, highlighting the milestones, strategic decisions, and investments that have shaped its growth. It showcases the company’s contributions to enabling digital commerce, supporting businesses, strengthening payment infrastructure, and expanding financial access through technology-driven solutions.The HabariPay Impact Report 2025 also highlights the company’s strong financial and operational performance, the growth of the Squad platform, and the development of infrastructure that powers payment acceptance, switching, transfers, merchant services, and value-added solutions. The publication further explores the role of innovation, talent development, and ecosystem partnerships in driving the company’s success.Speaking on the launch of the report, the Managing Director of HabariPay, Eduofon Japhet, said: “As a technology-driven company, we believe that impact extends beyond financial performance. It is reflected in the businesses we enable, the merchants we support, the infrastructure we build, and the opportunities we create for the next generation of innovators. The HabariPay Impact Report 2025 captures this journey and demonstrates our commitment to creating sustainable value for customers, partners, and the broader economy.”She further added: “The HabariPay Impact Report 2025 represents more than a reflection on our achievements; it is a testament to the deliberate investments we have made in building sustainable payment infrastructure, empowering businesses, fostering innovation, and creating long-term value for our stakeholders. As we look ahead, we remain committed to expanding our capabilities, deepening our impact, and shaping the future of digital payments through technology-driven solutions that are secure, scalable, and inclusive.”The report also showcases HabariPay’s investments in innovation through initiatives such as the Take on Squad Hackathon and the Squad Hackademy, both of which are helping to develop future technology talent and accelerate the creation of practical solutions to real-world challenges.Looking ahead, the publication outlines HabariPay’s vision for the future, including continued investment in payment infrastructure, merchant solutions, digital innovation, and intelligent technologies that will shape the future of financial services.
