Banking

HARARE (Capital Markers in Africa) – Zimbabwe’s central bank halved its key interest rate to 35%, joining the finance ministry in efforts to revive an economy hobbled by years of mismanagement. The decision reverses a move by the southern African nation’s newly formed Monetary Policy Committee in September, which raised the rate from 50%. It follows the unveiling last week of the 2020 budget which shows a planned surge in spending for next year. The…

LONDON (Capital Markets in Africa) – U.K. lawmaker Peter Hain accused international banks including HSBC Holdings Plc and Standard Chartered Plc of aiding and abetting graft in South Africa during former President Jacob Zuma’s rule and earning considerable fees in the process. The lenders enabled members of the Gupta family, who were Zuma’s allies and in business with his son, to launder stolen funds and remove them from South Africa by allowing them to open accounts and granting…

LAGOS (Capital Markets in Africa) – Citigroup Inc. is calling for greater consistency in implementing regulations for the banking industry in Africa and warned frequent changes will harm the sector. The bank’s business was one of 12 lenders Nigeria’s central bank penalized last month for failing to meet credit-provision targets. Citigroup was handed a 100.7 billion naira ($279 million) penalty out of a combined sanction of 500 billion that was transferred from the lenders’ cash reserves to the…

LAGOS (Capital Markets in Africa) – JPMorgan Asset Management’s Iain Stealey thinks his fellow bond traders aren’t being aggressive enough about the Federal Reserve’s future policy path. The fund manager expects that slowing global growth and deep-seated U.S.-China trade tensions will force the Fed to lower rates twice more in 2019. That’s more than futures traders, who are pricing in roughly 29 basis points of easing by the end of the year. Stealey is wagering that a…

LAGOS (Capital Markets in Africa) – Banks may be set for a harder time in the next few years as they face slowing earnings-per-share growth and mounting concern about tax hikes and tighter regulation if Democrats win in 2020, analysts say. Citi’s Keith Horowitz sees reduced earnings forecasts as bank stock valuations are “flashing red.” He updated his estimates and price targets to incorporate four interest rate cuts through 2020, which left Citi below Street estimates for…

JOHANNESBURG (Capital Markets in Africa) – The South African Reserve Bank’s ability to cut interest rates to boost the economy is limited by political and policy uncertainty and inflation that’s still not sufficiently anchored at the midpoint of its target range. Investors pay a premium for South African debt to compensate for the risk of holding it and this constrains monetary policy by raising the interest rate needed to stabilize inflation, the central bank said…

LAGOS (Capital Markets in Africa) – Nigeria’s central bank is increasing pressure on lenders to keep providing credit to boost economic growth in Africa’s biggest oil producer. The West African nation’s banking regulator raised the minimum loan-to-deposit ratio to 65% from 60% to “sustain the momentum” seen in lending since it first lifted the measure in July, it said in a statement dated Sept. 30. Banks have until Dec. 31 to comply with the directive…