Banking | - Part 9

Nigeria’s Bad Loans Soar as Banks Battle Slumping Economy

LAGOS (Capital Markets in Africa) – Bad loans in Nigeria’s banking system soared to more than double the limit set by the regulator as the industry struggles with an economic downturn. The ratio of non-performing loans to total credit rose to 11.7 percent at the end of June from 5.3 percent at the end of 2015, the Abuja-based Central Bank of Nigeria, which requires banks to keep the measure below 5 percent, said in a report…

‘Super Rate Hike’ Still Seen in Egypt as Devaluation Looms

Posted on by The Editorial Team

CAIRO, Capital Markets in Africa: Egypt’s central bank, which unexpectedly left borrowing costs unchanged last week, is keeping its powder dry for what one economist called a “super” rate increase. Five out of 8 economists in a Bloomberg survey had expected the Monetary Policy Committee to raise its key rate on Thursday to curb accelerating inflation and lay the ground for a widely anticipated devaluation. The meeting was likely the last before Egypt secures a…

Kenyan Lender CBA to Take Mobile-Bank Service Deeper Into Africa

Posted on by The Editorial Team

NAIROBI, Capital Markets in Africa: A Kenyan lender that transformed from an also-ran into the country’s biggest deposit-taker, mainly through a mobile-phone banking service started four years ago, plans to use the product as a beachhead to expand outside its East African home base. Commercial Bank of Africa Ltd., which also has units in Tanzania and Uganda, is seeking to export its M-Shwari mobile-phone service as part of a strategy to eventually have operations in 16 African…

Kenyan Regulator Says Rate Caps Complicates Monetary Policy

Posted on by The Editorial Team

NAIROBI, Capital Markets in Africa: Kenya’s decision to introduce caps on commercial-lending rates is complicating monetary policy, Central Bank of Kenya Governor Patrick Njoroge said. “With the rate caps, it’s not clear which way to go,” Njoroge told reporters in the capital, Nairobi, on Wednesday, a day after the central bank cut its benchmark rate by 50 basis points to 10 percent. The limits on borrowing rates may result in a “perverse reaction” among banks and lead to riskier…

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

Posted on by The Editorial Team

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…

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

Posted on by The Editorial Team

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…

Equity of Kenya Has 100 Billion Shillings to Help Double Loans

Posted on by The Editorial Team

NAIROBI, Capital Markets in Africa: Equity Group Holdings Ltd., Kenya’s biggest lender by market value, has as much as 100 billion shillings ($987.5 million) available for additional lending as it seeks to double business loans over the next three years, its directors said. With about 50 percent of the bank’s highest quality assets as a proportion of its cash outflows available, the lender has more than enough liquidity on hand for more loans, Chief Executive Officer James…

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