Devaluation First Victims? Banks In Nigeria Face Losses On Borrowed Funds

Deposit Money Banks that have obtained foreign loans running into hundreds of millions of dollars face record losses on the loans following the devaluation of the naira
by the Central Bank of Nigeria on Tuesday.

According to top banking sources, Eurobonds and other dollar-denominated loans obtained mostly from international capital markets and not hedged may make some banks to record foreign exchange losses in their income statements.

This, it was learnt, might ultimately reduce the profitability of some banks in coming months.

Nigerian banks have issued Eurobonds running into over $2 billion, aside other dollar-denominated foreign loans.

One of the sources familiar with the situation said, "Some banks have borrowed money in dollars from..........http://talkafrica.co/ng/p/6316/devaluation-first-victims-banks-face-losses-on-borrowed-fund
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