Banking

Lagos (Capital Markets in Africa) – Citi Research indicated that the pressure on the naira intensified in early March 2020 following the sharp decline in global oil prices. It noted that the Central Bank of Nigeria (CBN) devaluated on March 20 the official exchange rate from NGN306.5 per US dollar to NGN360.5 against the dollar. It added that the exchange rate on the NAFEX market weakened from about NGN365 per dollar in late February to…

JOHANNESBURG (Capital Markets in Africa) — RMB Holdings Ltd. will spin off its stake in Africa’s biggest banking group by market value even after turmoil in global stock markets caused the shares of both companies to plunge. The unbundling of FirstRand Ltd. to RMH’s shareholders will unlock 5.4 billion rand ($300 million) in value for investors of the holding company, who will now directly own equity in the banking group, Johannesburg-based RMH said in a statement on Tuesday. Since…

LAGOS (Capital Markets in Africa) — Nigeria’s central bank plans to set up an independently managed fund within the next 12 months to help build critical infrastructure in the West African nation once the coronavirus pandemic is over. The fund will start with a combination of debt and equity capital of 15 trillion naira ($39 billion) and focus on building transport networks “required to move agriculture products to processors, raw materials to factories, and finished goods…

NEW YORK (Capital Markets in Africa) — Executives at regional U.S. banks often say they’re only going to do as well as their clients. That’s now more true than ever. Investors are focused on which firms are exposed to the wrong industries as the coronavirus pandemic roils the economy, and they plan to scour for clues as the lenders report results in coming weeks. Bank stocks have plunged as the duration and severity of the…

CAIRO (Capital Markets in Africa) — After making its biggest-ever interest-rate cut, Egypt is likely to hold fire Thursday as it tries to ringfence its debt from an emerging-market selloff sparked by the coronavirus. While central bank Governor Tarek Amer has said there’s scope for another reduction if needed, nine of 10 economists surveyed by Bloomberg predicted the Monetary Policy Committee will maintain the key deposit rate at 9.25%. One analyst sees a cut to 8.25%. It slashed rates by 300…

JOHANNESBURG (Capital Markets in Africa) — The credit ratings of South Africa’s five largest banks were downgraded deeper into junk by Fitch Ratings, which cited a deteriorating operating environment following the outbreak of the novel coronavirus. The ratings were reduced by one notch to BB, two steps below investment grade and one notch lower than that of South Africa, Fitch said in a statement late Tuesday. Moody’s Investors Service also lowered its assessment on the…

LAGOS (Capital Markets in Africa) – Fitch Ratings has downgraded the three-highest rated banks in Nigeria, Zenith Bank (Zenith), Guaranty Trust Bank (GTB) and United Bank for Africa (UBA), to Long-Term Issuer Default Rating (IDR) ‘B’ and Viability Rating (VR) ‘b’. Fitch has also placed the Long-Term IDRs, VRs and National Ratings of all 10 rated Nigerian banks (excluding Stanbic IBTC Holdings (SIBTCH) and Stanbic IBTC Bank (SIBTC) – which are not assigned VRs and…