Banking

JOHANNESBURG (Capital Markets in Africa) — Absa Group’s warning that it may scrap its dividend for 2020 is unlikely to be the last from South African banks hard hit by the fallout from the coronavirus pandemic. “Banks won’t have certainty on their capital and liquidity positions until later in the year,” Nolwandle Mthombeni, an analyst at Mergence Investment Managers in Cape Town, said by phone. “So they might take a prudent approach.” While South Africa’s four…

JOHANNESBURG (Capital Markets in Africa) — Development Bank of Southern Africa is in talks with multilateral lenders and commercial banks to help plug a funding gap as disruptions in debt capital markets hinder its ability to sell bonds. The bank needs the extra financing to keep disbursing loans as demand jumps from countries trying to cope with the fallout from the coronavirus pandemic, DBSA Chief Executive Officer Patrick Dlamini said on a video call. Potential lenders include…

CAIRO (Capital Markets in Africa) — Egypt’s largest private lender is amassing cash so it will be able to consider dividend payouts at the end of the year when it has assessed the impact of the coronavirus pandemic. Commercial International Bank SAE has much more capital and liquidity buffers than required by regulators, giving the bank “an ample amount of firepower in case we want to increase dividends next year or keep them the same,” Chairman Hisham Ezz Al-Arab said…

LONDON (Capital Markets in Africa) — Bank of England Governor Andrew Bailey offered another hint that more bond purchases are on the way after figures showed a deep contraction at the end of the first quarter. He said it’s “pretty clear” investors expect more quantitative easing from the bank and that policymakers have kept the option open to do more than the 200 billion pounds ($240 billion) they announced in March. Investors have already stepped…

NEW YORK (Capital Markets in Africa) — The U.S. economy faces unprecedented risks from the coronavirus if fiscal and monetary policymakers don’t rise to the challenge, Federal Reserve Chair Jerome Powell said while pushing back against the notion of deploying negative interest rates. “The recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems,” Powell said Wednesday in remarks to a virtual event hosted by the Peterson…

LAGOS (Capital Markets in Africa) — After emergency meetings and aggressive interest-rate cuts to buffer their economies against the impact of the coronavirus pandemic, some central bankers in sub-Saharan African economies may follow a more measured approach when they sit down for their deliberations in the next two weeks. While monetary policy committees in South Africa and Kenya will probably take advantage of scope to lower rates even further, those in Nigeria and Zambia may…

LAGOS (Capital Markets in Africa) — FCMB Group Plc plans to restructure half of its loans after plunging oil prices, the coronavirus lockdown and a naira devaluation hindered the ability of the Nigerian bank’s clients to repay their debt. Credit facilities across industries ranging from oil and gas to small- and medium-sized enterprises will be reorganized, the Lagos-based lender said in a presentation on Tuesday. New terms will include a six-to 12-month moratorium on principal…