Banking

JOHANNESBURG (Capital Markets in Africa) – South Africa’s banking industry would be able to withstand a default by Eskom Holdings SOC Ltd. but the impact on pension funds is a concern for the central bank, Governor Lesetja Kganyago said. The power utility is laden with about $35 billion of debt, roughly equally divided into bonds and loans, according to data compiled by Bloomberg from public records, and is struggling to meet demand for electricity from aging and unreliable plants.  “What would…

JOHANNESBURG (Capital Markets in Africa) – Africa’s biggest bank said Lonmin Plc investors should reject Sibanye Gold Ltd.’s takeover offer as it undervalues the platinum miner’s assets by as much as 6.64 billion rand ($460 million). While Sibanye’s offer equates to 11.60 rand a share, Lonmin’s value at current metal prices is 45% higher, Leroy Mnguni, an analyst at SBG Securities, a unit of Standard Bank Group Ltd., said in a note to clients. If assets such as the platinum producer’s…

CAIRO (Capital Markets in Africa) – Egypt’s central bank left interest rates unchanged for a second meeting on Thursday as it faces a potential resurgence in inflationary pressures from a fresh wave of subsidy cuts. The Monetary Policy Committee kept the overnight deposit rate at 15.75% and the lending rate at 16.75% — a decision predicted by all but one of 11 economists surveyed by Bloomberg. Cairo-based investment bank EFG Hermes has said the pause may extend…

JOHANNESBURG (Capital Markets in Africa) – Old Mutual Ltd. suspended Chief Executive Officer Peter Moyo over what its directors called a “material breakdown in trust and confidence.” The insurer’s board, chaired by former Finance Minister Trevor Manuel, made the announcement hours before the 174-year-old company’s annual meeting with shareholders in Johannesburg without disclosing anything about alleged misbehavior. Chief Operating Officer Iain Williamson will serve as acting CEO. In a letter to shareholders, the company said the dispute stemmed…

LUSAKA (Capital Markets in Africa) – Zambia’s central bank raised its key interest rate for the first time since November 2015 in a bid to stabilize its currency, which is the world’s fourth-worst performer against the dollar this year. The Bank of Zambia raised the rate to 10.25% from 9.75%, Governor Denny Kalyalya told reporters Wednesday in Lusaka, the capital. Key Insights While the southern Africa nation’s annual inflation rate of 7.7% in April is…

LAGOS (Capital Markets in Africa) – Nigerian policy makers urged banks to turn on the taps and increase lending to stimulate the economy, or have access to a near-risk free way of making money choked off. The West African nation’s Monetary Policy Committee is using persuasion to get banks away from parking their cash in high-yielding government securities to divert these funds to the private sector. Lenders in the continent’s top oil producer were burnt after sliding…

LAGOS (Capital Martkets in Africa) – Nigeria’s Fidelity Bank Plc is seeking to boost customer numbers by 20% this year by pushing its digital channels and offering loans to low-income borrowers via their mobile phones. The bank hopes to increase its clients from 4.5 million in 2018 and expects return on equity to rise to 13% from 11.8%, Executive Director Gbolahan Joshua said in an interview. More than 150,000 customers have applied for digital loans since it started providing…