UBA, Wema Bank, Stanbic IBTC, 3 Others Disqualified From CBN’s Recent FX Intervention

SIX major banks, including United Bank for Africa (UBA), Wema Bank, Stanbic IBTC, and three, were barred from participating in a recent retail Dutch Auction held by the Central Bank of Nigeria (CBN).

During the auction, the CBN successfully sold $876.26 million to 26 eligible banks as part of its ongoing efforts to reduce pressure on the foreign exchange (FX) market and enhance price transparency.

This auction represents a significant FX intervention by the CBN under Governor Yemi Cardoso, who is focused on stabilising the naira and addressing persistent volatility in the FX market.

According to the CBN, a total of $1.18 billion in bids were received from 32 banks, but $279.04 million worth of bids from six banks were disqualified for various reasons.

Disqualified Banks

United Bank for Africa (UBA), one of Nigeria’s top financial institutions, saw its $13.21 million bid disqualified due to late submission.

Similarly, First City Monument Bank (FCMB), which had the largest disqualified bid at $178.65 million, also missed the deadline, resulting in the invalidation of its bid.

Stanbic IBTC, another major player in Nigeria’s banking sector, had its $57.86 million bid disqualified for the same reason as UBA and FCMB—late submission. This underscores the stringent compliance standards enforced by the CBN.

Wema Bank, known for its innovation, particularly with its ALAT digital banking platform, also faced disqualification for late submission, rendering its $21.94 million bid invalid.

SunTrust Bank, a relatively new entrant in Nigeria’s banking industry, had its $7.38 million bid disqualified, not for late submission, but for failing to provide the necessary bid rates.

Lastly, Rand Bank was disqualified for failing to submit any bids, resulting in no amount being associated with the bank in this auction.

These disqualifications led to the exclusion of $279.04 million from the auction.

The Retail Dutch Auction, which took place on 6 August 2024, was part of the CBN’s strategy to allocate FX to end-users, particularly those with trade-backed demands, in a bid to stabilise the naira.

The successful bids were settled on 8 August 2024, as part of the T+2 settlement process.

The disqualification of leading banks such as UBA, Wema, and Stanbic highlights the rigorous regulatory standards set by the CBN, emphasizing the importance of meeting submission deadlines and accurately completing bid templates in future auctions.

Source: Nairametrics

Eighteen-Eleven Media