Amidst Presidential Probe, CBN Releases Results After 8 Years

The Central Bank of Nigeria (CBN) has released its consolidated financial statements for a period of eight years – 2015 to 2022, showing that the apex bank made a cumulative net profit of N103.8bn in 2022, up from N75.13 billion reported in 2021. The bank last posted its statement of account in 2014.

This is iconic for the bank’s transparency as it had failed to tender the financial statements for the past years despite calls for it from interested parties to do so. This is coming amidst presidential investigation into the books of the bank.

President Bola Tinubu had ordered the investigation of the central bank and related Entities with the appointment of a special investigator, Jim Osayande Obazee, to carry out the task.

According to the consolidated financial statement of the bank that was obtained from the website of the apex on Friday the bank made loses in 2018 and 2020 financial years.

The reports on the bank’s website showed that it recorded significant profits N103,854 billion in 2022 which is higher than the N75,125 billion net profit of 2021. In 2020, N30.814 billion came in as profit after tax, 2019: 34.638 billion, 2018: N43.770 billion, 2017: N107.397 billion, 2016: N124.479 billion and N123.074 billion in 2015.

In 2014 when suspended CBN governor Godwin Emefiele took over as head of the apex bank, the bank made net profit after tax of N33.600bn after less income tax expenses of N6.520bn. CBN posted N 213.562 as net income for 2013.

The auditors of the consolidated financial statement of the bank commended management of the bank for its disclosures in line with the relevant accounting guidelines. “We reviewed the disclosures made by management to confirm its consistency with the recommended practices in the approved guidelines as issued by the Financial Reporting Council of Nigeria,” KPMG and EY said in the report of the independent joint auditors to the members of the CBN.

In the financial disclosure for the fiscal year concluding in December 2022, the central bank confirmed its indebtedness to JP Morgan and Goldman Sachs, with a total outstanding debt of $7.5 billion. Among its liabilities, an additional $6.3 billion is attributed to foreign currency forwards.

The apex bank, however, has detailed a nuanced breakdown of its owed amounts. According to official sources, Goldman Sachs is owed $500 million, while JP Morgan holds a larger share of the debt, amounting to $7 billion. These financial obligations have been categorised by the bank as securities lending.

The financial report for the year 2022 elaborates on the specifics of these transactions. The CBN engaged in securities lending agreements with both Goldman Sachs and J.P. Morgan. As part of these arrangements, the bank collateralized its foreign securities holdings in exchange for cash funds. Notably, the funds received from Goldman Sachs are recorded at N0.23 trillion ($500 million), consistent with the 2021 figures, and JP Morgan’s funding is documented at N3.23 trillion ($7 billion), mirroring the 2021 amount. These sums have been duly acknowledged within the context of other foreign securities.

These securities lending endeavors contribute to the larger framework of the CBN’s external reserves, which are estimated at approximately N14.3 trillion or $29 billion, calculated using the official exchange rate of N494/$1, as of the year 2022.

However, the CBN’s financial obligations extend beyond securities lending. An additional liability of N3.15 trillion ($6.3 billion) is attributed to foreign currency forwards, representing forex commitments that must be honored towards foreign investors