Banking

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…

LAGOS (Capital Markets in Africa) — Nigerian President Muhammadu Buhari urged international financial institutions to cancel the debt obligations of member states to help them withstand the fallout of the coronavirus pandemic. In a meeting with other heads of state from the Non-Aligned Movement, Buhari urged official lenders to help cushion the pandemic fallout with “outright debt cancellation,” according to a statement sent by his office. Nearly half of Nigeria’s outstanding external debt is with…

LAGOS (Capital Markets in Africa) — Nigerian banks have more to worry about than the coronavirus: Cratering oil prices and the threat of another naira devaluation are emerging as the biggest risks to how many lenders will emerge unscathed. The industry has already agreed to forgo profit to support the economy as measures to contain the Covid-19 outbreak bring most businesses to a halt. Now, oil prices near $15 a barrel are drying up the largest source of foreign…

LAGOS (Capital Markets in Africa) — Access Bank Plc plans to cut salaries to avoid job losses as a lockdown to contain the coronavirus hampers the operations of Nigeria’s biggest lender, according to people with direct knowledge of the matter. The reductions are expected to start from May unless business conditions improve, said the people, who were briefed on the matter during a conference call and asked not to be identified because they’re not authorized…

LAGOS (Capital Markets in Africa) – Moody’s Investors Service indicated that a prolonged period of capital outflows from emerging markets (EMs) will have an adverse impact on the foreign-currency liquidity, asset quality, and profitability of African banks in 2020. It said that the banking sectors of Angola and the Democratic Republic of the Congo are the most exposed to capital outflows, given their high dollarization rates, as well as to the elevated reliance of the…