(Bloomberg) -- Nigeria’s proposed windfall tax on foreign exchange gains made by the country’s banks will consume only a modest slice of the profits of Standard Bank Group Ltd.’s local unit, the lender said on an investor call Wednesday.
“What they are referring to as windfall tax for us in Stanbic IBTC will account for less than 10% of our profit after tax,” as of 2023, said Demola Sogunle, chief executive for Stanbic IBTC Holdings Plc. “For now we are not seeing any major impact on us,” Sogunle said.
The West African nation in July announced a 70% tax on banks’ foreign exchange gains in a bid to improve the country’s strained fiscal position. Moody’s called the tax credit negative and an industry lobby criticized the plan as burdensome on a sector already facing economic headwinds, while raising fresh capital to obey a central bank requirement.
Stanbic IBTC will conduct a rights issue before year end to meet the higher minimum capital threshold, Sogunle said, adding that he expects the offering to be a success owing to the lender’s financial performance, dividend payment history and the backing of its parent.
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