It is also expected to affect their non-interest income this quarter, and may be more severe on banks with significant contribution to their gross earnings from E-business in the first half of the year.
Currently, Skye Bank Plc, Guaranty Trust Bank Plc (GTBank), Standard Chartered Bank, and Stanbic IBTC Bank have stopped the withdrawal of foreign currencies from the ATMs by their customers who travel abroad. The banks also advised customers seeking to do FX transactions to open domiciliary accounts.
The banks cited dollar scarcity and volatility in the foreign exchange market as reasons. This development followed the directive by the Central Bank of Nigeria (CBN), which mandated all banks with the exception of FBN Holdings, to sell their dollar inflows from remittances to Travelex, for onward sale to the BDCs.
Analysts at Lagos-based CSL Stockbrokers Limited stated:“We see this impacting on banks profitability. E-business Income segment is basically card related businesses, transactional income, exchange rate gains and other related services.”
“Banks make money from this segment when customers use their debit or credit cards for online transactions, money transfer to beneficiaries or for withdrawals in either local or foreign currency,”
In the first half of 2016, there were significant surge in E-business income of most banks. While some of this income was attributed to a jump in volume of card transactions, it was believed that a significant portion was as a result of the spread made on foreign currency transactions.
