Banking

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…

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…