Foreign Exchange Income And Financial Performance: Evidence From Listed Deposit Money Banks In Nigeria

Abstract

The study examined the effect of Foreign Exchange Income on Financial Performance, evidence from Listed Deposit Money Banks in Nigeria. The specific objectives of the study were to: Ascertain the effect of fixed income securities on profit for the year of the listed deposit money banks, and evaluate the effect of foreign currency revaluation income on profit for the year of the listed deposit money banks in Nigeria. An ex-post facto research design was adopted for the study. Historical financial data were obtained from annual reports and audited financial statements of the chosen financial services businesses listed on the Nigerian Exchange Group for the study. Panel Data Regression and Pearson's Product-Moment Correlation research were the primary statistical methods used in the research. The Panel Data Regression analysis was employed specifically to test the null hypotheses for the study. The result revealed that fixed-income securities have non-significant and positive influences on profit for the year of the listed deposit money banks in Nigeria. Foreign currency revaluation income has a significant and positive influence on profit for the year of the listed deposit money banks in Nigeria. The study concluded that Foreign Exchange Income has a significant influence on Financial Performance: Evidence from Listed Deposit Money Banks in Nigeria. The study recommended that given the strong contribution of revaluation income to profits, banks should manage foreign currency assets and liabilities more strategically, using appropriate hedging instruments (e.g., forwards, swaps, and natural hedges through matched currency cashflows) where feasible.