CBN reveals $13.8 billion debt owed to JP Morgan, Goldman Sachs, FX Forwards

Nigeria’s central bank owes JP Morgan and Goldman Sachs a combined sum of $7.5 billion as of the financial year ended December 2022.

Also included as part of its liabilities is another $6.3 billion owed in foreign currency forwards.

This is contained in the audited financial statement of the apex bank, published on its website. Nairametrics earlier reported the bank reported a profit after tax of N103.8 billion in its most recent financial year.

The apex however stated it owes Goldman Sachs $500 million and JP Morgan $7 billion in what it classified as securities lending.

“The Group entered into a securities lending agreement with Goldman Sachs and J. P. Morgan and as part of the agreement, the Group pledged its holdings on foreign securities in return for cash. The cash received from Goldman Sachs is N0.23 trillion ($500 million), 2021: N0.22 trillion ($500 million), and JP Morgan N3.23 trillion ($7 billion), 2021: N3.05 trillion ($7 billion) is recognized in other foreign securities.” CBN Financial Statement excerpt

The securities lending forms part of the CBN’s total external reserves of about N14.3 trillion or $29 billion using the official exchange rate of N494/$1 as of 2022.

However, the apex bank also owes another N3.15 trillion ($6.3 billion) in foreign currency forward which are forex obligations it needs to make to foreign investors.

Further analysis of the breakdown of the apex bank’s external reserves reveals it is made up of the following;

Time deposits and money placements – N4.6 trillion Other foreign securities – N5.8 trillion Current accounts with foreign Banks (GS and JPM) – N3.34 trillion Domiciliary accounts _ 294.8 billion Sundry currencies and travellers’ cheques – N199.8 billion

This totals a sum of about N14.4 trillion or $29 billion. Adding the N578.6 billion ($1.1 billion) held in Gold Bullion Reserves takes the grand total to about $30.1 billion. This is according to figures in its financial statements.

While the central bank suggests it had about $30.1 billion, backing out other obligations such as securities and lending and foreign currency forwards means it has just a net reserve of $ 17 billion.

The current status of the loans is not clear as the apex bank is yet to publish any interim financial statement in this regard.

However, the CBN external reserve position published on its website as of December 2022 was $37 billion. It is currently $ 33.9 billion.