Banking | - Part 105

Banker-Bashing Is a Dangerous Thing. Just Look at Kenya

NAIROBI, Capital Markets in Africa: The frontier market of Kenya isn’t often on U.S. or European investors’ radar. It should be. It offers a timely reminder of financial markets’ complacency about the risk of populism; and the attractiveness of bashing banks to win votes. East Africa’s most advanced economy has introduced a law setting a cap on commercial lending rates and a floor on deposit payout rates, an instant squeeze on margins that sent shares of Kenyan…

Kenya Cuts Rates Weeks After Capping Cost of Commercial Credit

Posted on by The Editorial Team

NAIROBI, Capital Markets in Africa: The Central Bank of Kenya reduced its benchmark rate by 50 basis points to 10 percent, its second cut in four months, in a bid to boost private-sector credit amid government restrictions on loan costs. “The MPC noted the continued decline in growth of private sector credit, which has persisted since the last meeting, posing a risk to economic growth,” Governor Patrick Njoroge said in an e-mailed statement from the capital, Nairobi, Tuesday. Only…

Ghana’s Central Bank Keeps Benchmark Interest Rate in Sept

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ACCRA, Capital Markets in Africa: Ghana’s central bank kept its benchmark interest rate unchanged for a fifth consecutive meeting after inflation accelerated in August. The Bank of Ghana held the rate at 26 percent, Governor Abdul Nashiru Issahaku told reporters Monday in the capital, Accra. That was in line with the forecast of six of the eight economists in a Bloomberg survey. One said the rate would be cut by 100 basis points and another forecast a 200 basis-point…

Mozambique delays MPC meeting by a month

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MAPUTO, Capital Markets in Africa: The Mozambique central bank’s Monetary Policy Committee (MPC) will hold its next meeting in October and not September as earlier planned, the bank said on Friday, without giving reasons. The MPC will hold its ninth meeting of the year on Oct. 21, the central bank said in a statement. The bank lifted its main lending rate by 300 basis points to 17.25 percent in July due to soaring inflation and…

National Bank Sees 10% of Profit From Global Business by 2020

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LAGOS, Capital Markets in Africa: National Bank of Canada seeks to generate at least 10 percent of profit from its international business by 2020, while looking to expand its stakes in Africa and Asia lenders into controlling positions, Chief Executive Officer Louis Vachon said. “We are looking to complement our Canadian growth — not substitute, but complement our Canadian growth — with a disciplined international strategy that delivers higher returns,” Vachon, 54, said Friday at the bank’s international…

Interest Rate Caps Boon for Big Kenyan Banks, Equity CEO Says

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NAIROBI, Capital Markets in Africa: A decision to cap Kenyan interest rates may favor the biggest banks as small lenders will struggle to raise cheap deposits to fund lending, according to Equity Group Holdings Ltd. Chief Executive Officer James Mwangi. At least 30 of Kenya’s 42 lenders may have difficulty paying the minimum for deposits as demanded by a new law on interest rates that came into effect on Sept. 14. The legislation limits borrowing costs…

South Africa Bank That Gave Zuma Loan Says It Stuck to Rules

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Johannesburg, Capital Markets in Africa: A South African bank that gave President Jacob Zuma a mortgage to settle a Constitutional Court order to repay taxpayers the money spent on upgrading his residence said it sticks to loan processes no matter who the client is. “In granting a loan, the usual processes and conditions apply no matter who the client may be,” VBS Mutual Bank Chief Executive Officer Andile Ramavhunga said in an e-mailed statement on Wednesday. “VBS Mutual Bank…

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