Twelve Nigerian banks borrowed about N9.81 trillion from international finance institutions, Central Bank of Nigeria (CBN), among others, between 2018 and 2020 in a bid to tap the opportunity of low interest rate outside the shore of the country.
The banks raised the fund for onward lending to local businesses from international financial institutions such as International Finance Corporation (IFC), African Development Bank (AfDB), JP Morgan Securities Limited.
The banks also access facilities such as Shared Agent Network Facility (SANEF), Non Oil Export Stimulation Facility (NESF), Anchor Borrowers’ Fund, Economic Recovery Fund (ERF), among others from CBN to support targeted sectors.
United Bank for Africa Plc (UBA) Plc leads Tier-1 banks chart in borrowing from these international finance institutions and CBN followed by Zenith Bank Plc and Access bank Plc.
On the flipside, Unity bank Plc borrowing from the CBN leads the Tier-2 banks chart.
Other banks that have access funds from these international financial institutions and CBN are; Access Bank Plc, Zenith Bank Plc and FBN Holdings Plc.
Others are; Fidelity Bank Plc, FCMB Group Plc, Union Bank of Nigeria Plc, Stanbic IBTC Holdings, Wema Bank Plcand Sterling bank Plc.
In the last three years, UBA’s recorded a long/short term borrowing of about N2.14 trillion from Eurobond debt security, ADB, Proparco, JP Morgan Securities Limited, Agence Francaise de Development (AFD)l, African Export-import Bank, CBN, among others.
The breakdown of UBA’s long/short term borrowing revealed that, a total of N694.4 billion was borrowed in 2020 compared with N758.68 billion and N683.53 billion in 2019 and 2018, respectively.
The Pan-African bank in November 2021, invited interests from holders of its $500 million Eurobond due for maturity in 2022 for redemption ahead of time through a cash tender offer before issuing $300 million similar note.
Amid global and domestic challenges, the bank noted that its $300 million Eurobond had attracted 1.7 times oversubscription from investors across the globe.
Analyst at PAC Holdings, Wole Adeyeye noted that UBA needed to borrow from these international finance organizations to meet its lending demands in the continent.