Banking

LONDON (Capital Markets in Africa): The Federal Reserve established temporary dollar liquidity-swap lines with nine additional central banks, expanding the rapid roll-out of financial-crisis-era programs to combat the economic meltdown from the coronavirus pandemic. The new facilities total $60 billion for central banks in Australia, Brazil, South Korea, Mexico, Singapore, and Sweden, and $30 billion each for Denmark, Norway, and New Zealand. The swap lines will be in place for at least six months. The…

NAIROBI (Capital Markets in Africa) – The coronavirus outbreak will hurt Kenyan business revenues if it lasts longer than 90 days as employees stay away from work and companies halt operations, according to Standard Chartered Bank Kenya Ltd. “We are starting to engage with clients to see what is the impact,” Chief Executive Officer Kariuki Ngari said. “We believe it will get worse before it gets better. We are hopeful like everybody else that it will not…

LAGOS (Capital Markets in Africa) – Nigeria’s central bank will bolster its support to manufacturing and other key sectors of the economy by 1 trillion naira ($2.7 billion) to counter the fallout of the coronavirus outbreak. The bank will provide a 100-billion naira loan to health authorities as Africa’s most populous nation tries to contain the spread of the new virus, it said in a statement on Wednesday. The central bank will increase efforts “in…

LAGOS (Capital Markets in Africa) A sustained period of low oil prices will weaken dollar liquidity and elevate asset risks for Nigerian lenders as their “balance sheets are partially dollarized,” Moody’s Investors Service said. “Foreign-funding contributes about 25% of total funding and low oil prices translate to lower foreign currency receipts for the Nigerian government,” analysts including Peter Mushangwe said in a note to clients on Thursday. Banks will come under pressure from a drop in foreign…

JOHANNESBURG (Capital Markets in Africa) – South Africa’s biggest banks are increasingly relying on the rest of the continent to make money as an economic recovery at home ebbs ever further away. The Big Four make the bulk of their profit in Africa’s most industrialized country, where power shortages, incoherent government policies, corruption and ailing state-owned companies have drained the fiscus and resulted in two recessions in as many years. None of the top bankers…

KAMPALA (Capital Markets in Africa – Uganda’s central bank pointed to “abnormally low” rates for U.S. Treasury securities as a major reason behind the reported loss of 2 trillion shillings ($545 million) in the past 15 years.   Over 90% of Bank of Uganda’s earnings are from interest income on foreign-reserve assets, spokeswoman Charity Mugumya said in an emailed response to questions, after lawmakers last week raised concerns about the bank’s ability to deliver on its…

LAGOS (Capital Markets in Africa) – Dwindling reserves and lower oil prices will probably force the Nigerian central bank to devalue one of the world’s most stable currencies by next year, according to a Bloomberg survey of investors and analysts. Ten out of 19 respondents expect the naira to be weakened in 2021, while five predict a mark-down as early as the second half of this year. The remainder believes the central bank will keep…