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SSA news through July 21


Banking Essentials Newsletter: January 11th Edition


Banking Essentials Newsletter December 21st Edition


The Road to Basel IV: Navigating the challenge facing European banks


Basel Framework- Utilizing data to analyze the capital position of European banks.

SSA news through July 21

* An Ernst & Young report this week said pretax profits of the largest 26banks in some of the largest banking markets in sub-Saharan Africa declined to$11.7 billion in 2015 from $11.9 billion in 2014. The report showed thatNigerian banks' pretax profits fell 29% last year, while Kenyan banks'profits rose 4.4%. Tanzania's banks saw the strongest profit growth, and SouthAfrica's banking profits were robust despite weak local growth, the reviewfound.

* The IMF said in its latest report on World Economic Outlookthat growth projections were revised down substantially in sub-Saharan Africa,reflecting challenging macroeconomic conditions in its largest economies, whichare adjusting to lower commodity revenues. The agency expects Nigeria's economyto contractby 1.8% in 2016 as the country struggles to adjust to foreign-currencyshortages driven by the decline in oil prices, low power generation and weakinvestor confidence. The projection is down 4.1 percentage points from thegrowth the fund foresaw in its April forecast; the growth projection for 2017was lowered 2.4 percentage points to 1.1%. In SouthAfrica, GDP is projected to remain flat in 2016, with only a modest recovery in2017.

* Estimates from Thomson Reuters and Freeman Consultingshowed that debt issuance in sub-Saharan Africa declined on a yearly basis by10% in the first half, raising only $6.9 billion in the period, Reuters reported.The decline was driven by sinking currencies and weakening economies, whichmade African states and companies more hesitant to tap capital markets.


* Central Bank of Kenya Governor Patrick Njoroge orderedbanks to disclose their main shareholders on their respective websites in a bidto improve transparency and governance rules in the sector, the DailyNation reported. Banks must by Aug. 1 list on their websites allshareholders that have at least a 5% stake. Njoroge added that the central bankalso plans to impose term limits for bank CEOs and nonexecutive directors,saying that unlimited directorship tenures will "breed complacency"in banks.

* Kenya's Capital Markets Authority outlined plans to provide a regulatory framework for onlineforex trading by making amendments to the Capital Markets Act, FinanceMagnates wrote. Under the draft amendments, online forex brokerswill have to obtain a license from the CMA and will be required to have a minimumcapital of 50 million shillings.

* The Kenya Deposit Insurance Corp. will begin disbursementof additional funds to depositors in troubled Imperial Bank Ltd. from July 26, following a court orderallowing such disbursements. Depositors will be able to access additional fundsof up to 1.5 million shillings through NIC Bank Ltd.  

* Almost all borrowers of now-defunct Dubai Bank Kenya Ltd.have stopped repaying their loans, bringing its NPL ratio to 99%, BusinessDaily Africa reported. The Kenya Deposit Insurance Corp. said it willtake legal action against the loan defaulters and seize their assets.

* First Assurance, which is majority-ownedby Barclays Africa GroupLtd., is set to get a 300 million Kenyan shilling capitalboost, accordingto Business Daily Africa. The latest round of funding is in additionto the 400 million shilling injection First Assurance received since BarclaysAfrica acquired a 63.3% stake in the insurance firm in 2015.

* Adam Mugume, executive director for research at the Bankof Uganda, warned that the country could face "debt distress" inabout two years if the government further delays the start of its oilproduction, Reuters wrote.The government had said that oil pumping will begin after 2020 followingcompletion of a pipeline through neighboring Tanzania.

* The Bank of Mauritius' monetarypolicy committee slashed the key repo rate by 40 basis points to 4.0%per year, citing increasing downside risks to the global economic outlook inthe wake of the U.K's vote to leave the EU.


* The Central Bank of Nigeria granted  a short-term loan tohelp stabilize the bank's operations, according to Reuters. The bank was hit by a wave ofpanic withdrawals after the central bank replaced its senior executives earlierthis month.

* SterlingBank Plc ended talks to acquire  after concludingthat it was an unsuitable fit to its strategic plan, Reuters reported. Sterling Bank CFO Abubakar Suleiman said the lenderwill continue to evaluate other acquisitions, but that any move would likelyhappen after its assessment of the impact of the 30% fall in the value of thenaira in June.

* The Accountant General of the Federation of Nigeriaquestioned Guaranty TrustBank Plc, Stanbic IBTC Holdings Plc, Keystone Bank and otherlenders over alleged violations of the treasury single accounts directive byconcealing funds belonging to government entities, Naija247news reported. Stanbic IBTC denied the allegations.

* The Bank of Ghana's monetary policy committee kept its benchmarkpolicy rate unchanged at 26%, saying it views the risks to growthand the prospect of inflation to be balanced. The Ghanaian finance ministry,meanwhile, increased its 2016 economic growth forecast to between 4.1% and4.3%, two weeks after cutting it to 3.2% from 5.4%, Bloomberg News reported.

* Ghana could lose out on the next tranche of its IMF loansafter the parliament proposed a revision to the Bank of Ghana Amendment Bill toallow the central bank to help finance a national budget deficit by up to 5% ofthe previous year's total revenue, Reuters reported.The IMF had told Ghana to set a zero limit on monetary financing from thecentral bank to the government and public institutions.

* Ghana's central bank is planning to tighten thesurveillance of unlicensed investment clubs that pose as microfinanceinstitutions by requiring them to provide constant reports about theiroperations and forcing them to give detailed information about their loanarrangements, Joy Business covered.

SOUTHERN AFRICA                

* The South African Reserve Bank'smonetary policy committee kept the repurchase rate unchanged at 7.0% per annum, saying the weak domesticeconomy has "provided some room to delay further tightening of themonetary policy stance for now."

* EPE Capital Partners Ltd., alsoknown as Ethos Capital, announced its intention to float on the JohannesburgStock Exchange. The company plans to issue up to 200 million A ordinaryshares to select and institutional investors via a private placement as itseeks to raise up to 2 billion rand.

* Graviton Financial Partners, awholly owned subsidiary of Sanlam Ltd.'s Sanlam Investment Holdings Ltd., acquired a 49% stake inFirstglobal Asset Management for an undisclosed amount,Independent Online wrote.

* The Mozambican central bankraised its benchmark interest rate by 300 basis points to 17.25%, the fourthhike this year as the institution aims to tackle inflation of nearly 20%,Reuters reported.


* Democratic Republic of theCongo Prime Minister Augustin Matata Ponyo the central bank to stop makingloans to Banque Internationalepour l'Afrique au Congo, saying the move is contributing to theweakening of the country's currency and has a negative impact on the economy.The central bank took over statutory management of the ailing bank in May andhas since loaned it 125 billion Congolese francs to help address a continuingliquidity crisis.