Otunba Olasubomi Balogun, founder of First City Monument Bank (FCMB), has passed away in a London hospital. Here are seven things to know about him: he was born in 1934, studied law in London, founded FCMB, held chieftaincy titles, and made significant contributions to education and healthcare.
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Togo: Shareholders approve lower dividend, capital increase
Shareholders of Ecobank Transnational Incorporated (ETI) approved a dividend of $28 million, or $0.11 per share, at their general meeting in Lomé, Togo, on Wednesday, May 17. The dividend level for this year represents a 32.25% decrease compared to the previous year. The new CEO attributed the company’s robust performance to its diversified business model, expertise in the digital field, innovative approaches, and operational efficiency. During an extraordinary meeting following the ordinary general meeting, shareholders authorized the executive management to mobilize $500 million in 2023 to strengthen the institution’s sustainable resources.
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Nigeria: Stanbic offers discounted loans for women in business
Stanbic IBTC Bank is offering a 50% discount on loan fees to female entrepreneurs in the Blue Blossom Community. The community provides training, mentorship, and networking opportunities to help women succeed in business. Women above 18 years of age can join the community and access various financial solutions. The bank emphasizes financial dignity and encourages early investment and savings for sustainable income.
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Ethiopia: Safaricom’s M-Pesa to compete with Telebirr
Safaricom, the largest telecom company in East Africa, has paid $150 million for a license to offer its M-Pesa mobile money service in Ethiopia. This move allows Safaricom to compete with Telebirr, the state-owned mobile money service. Despite the challenges and a drop in earnings, Safaricom aims to replicate the success of M-Pesa in Kenya in the Ethiopian market, which has a population of 120 million.
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Uganda: Female bankers more numerous, male more successful
A report by the Uganda Bankers Association, an umbrella association of the banking sector, reveals that while many financial institutions have a significant number of women employees, men still dominate executive positions. Only eight out of 36 institutions have female CEOs. Some banks, like Brac, have a larger proportion of women staff, but others, including Centenary Bank and Post Bank, are still male-dominated. Affirmative action programs and upcoming initiatives aim to promote gender equity in employment.
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Nigeria: Access Bank to open Paris office
Access Bank, one of Nigeria’s leading banks, has obtained regulatory approval to operate in France, marking its expansion into the French market. The move is part of Access Bank’s strategy to replicate its success in international trade finance from London to Paris. The bank aims to serve as a bridge for international companies looking to enter or expand their business in Africa. Access Bank has a presence in multiple African countries and plans to expand further, with a goal of becoming one of the top five largest institutions on the continent in the next five years.
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South Africa: Absa Group to open Beijing office
Absa Group plans to establish its first office in China by the end of this year, aiming to connect Chinese companies doing business in Africa with the bank. The move reflects the bank’s commitment to China and its belief in the country’s future growth. China is Africa’s largest trading partner, and Absa Group sees strong revenue growth potential in the China Corridor. In addition to the new office, the bank has signed an agreement with China Development Bank for a working capital facility, further solidifying its relationship with Chinese partners.
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Kenya: KCB overtakes Equity Bank as #1 by assets
KCB Bank has overtaken Equity as Kenya’s largest lender by asset size due to aggressive expansion of foreign subsidiaries. KCB’s total assets reached KES 1.55 trillion, surpassing Equity’s KES 1.44 trillion. However, Equity outperformed KCB in profitability. The competition between the two banks intensifies as they focus on regional expansion and vie for dominance in the banking industry. KCB also leads in customer deposits, net customer loans, branch network, and employment in the sector.
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Madagascar: Central Bank, IFC to strengthen credit reporting system
The International Finance Corporation (IFC) and the Central Bank of Madagascar have partnered to enhance the country’s public credit registry, aiming to improve credit reporting and expand access to finance for individuals and small businesses. The collaboration involves strengthening credit data sharing, training Central Bank employees, and promoting a functional credit information system. The project aims to support economic activity, create jobs, and bolster financial sector resilience in Madagascar. It will also facilitate collaboration between the public credit registry and the private credit bureau.
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Nigeria: Telcos to suspend USSD services for banks
Mobile operators in Nigeria, including MTN Group and Airtel Africa, will disconnect text message services for banks until $259 million in debt is paid. The dispute over pricing and unremitted fees has been ongoing for two years, with the operators hoping that the withdrawal of services will prompt a resolution. Banks argue they do not owe arrears to mobile-phone companies.
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Capitec: Higher profits despite increased impairments
Capitec CEO Gerrie Fourie has warned customers to “live within their means” as the South African lender has reported an 80% increase in credit impairments to ZAR6.3bn ($404m) amid a tough economic climate. Net loans and advances grew by 17% to ZAR78.2bn. Fourie attributed the credit losses to the deteriorating economy and inflation. Meanwhile, Capitec has cut its credit limit for customers by ZAR3.5bn, and only approves 45% of loan applications, down from its previous low of 60%. The lender has invested ZAR1.4bn in strategic initiatives including the expansion of Capitec Connect and the creation of an insurance business.
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Kenya: Flutterwave selects Nairobi for East Africa hub
Flutterwave, the San Francisco-based African fintech company, has selected Nairobi, Kenya as its regional headquarters for East Africa, citing the country’s business-friendly environment and digital capabilities. The announcement follows the receipt of two additional licenses to operate in Rwanda, allowing Flutterwave to expand its operations in the East African nation. The company’s chief regulatory and government relations officer, Oluwabankole Falade, made the announcement during the third American Chamber of Commerce Business Summit held in Nairobi.
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Kenya: Digital lenders raise ethics questions
The number of digital lenders and loans disbursed through mobile phone apps in Kenya have grown substantially since the launch of M-Shwari in 2012. However, concerns have been raised about the largely unregulated fintech industry, with the possibility of leading to a credit crisis, particularly since debt-collecting methods like debt shaming and incessant calls are frequently used by creditors. Kenya’s Central Bank (KCB) reported that, as of November 2022, about 14 million accounts had been listed for defaulting on digital lending apps. Industry experts fear the 14 million defaulted accounts could create a bubble in the economy, leading to a credit crunch and eventually an economic recession.
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Nigeria: UBA profits jump
United Bank for Africa (UBA) has released its Q1 2023 unaudited results, showing significant growth across its major income lines. The bank’s gross earnings rose by 47.5% to ₦271.2bn ($658m) from ₦183.9bn in Q1 2022, while interest income grew by 53.4% to ₦191.9bn. Operating income also rose by 39.6% to ₦175.7bn. UBA’s profit before tax (PBT) rose by 38.2% to ₦61.4bn, and its profit after tax (PAT) jumped by 29.1% to ₦53.6bn. UBA CEO Oliver Alawuba attributed the growth to the bank’s digital offerings and uptick in interest rates.
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Standard Chartered, IFC sign $700m trade finance program
Standard Chartered and the International Finance Corporation (IFC) have signed a $700m investment in IFC’s Global Trade Liquidity Programme to support global trade finance. The facility is expected to support up to $6.4bn in trade over three years across Asia, the Middle East, Africa and Latin America by supporting about 850 importers and exporters involved in critical commodities, basic goods and other essential materials. The GTLP programme continues to evolve to reflect changing market dynamics and now features a significant climate component as well as seeking greater activity in the areas of IDA markets and food security.
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Nigeria: Bank borrowing from CBN rises
Several Nigerian banks, including Access Bank, First Bank, and United Bank of Africa, have borrowed over N240 billion from the Central Bank of Nigeria through the Standing Lending Facility to fund their operations. The increase in borrowing may be due to a currency redesign policy that led to cash shortages, causing customers to keep money at home instead of depositing it in banks.
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Kenya: Central Bank upgrades payment system
The Central Bank of Kenya has upgraded its Kenya Electronic Payment and Settlement System (KEPSS) by migrating the platform to new ISO 20022 message standards. This is expected to improve the exchange of financial messages by inlaying richer data on transfers and enhancing the accuracy of vetting trading parties. The upgrade is part of the National Payment Strategy 2022-2025 and aims to modernise the National Payments System to world-class standards. KEPSS is a Real Time Gross Settlement System (RTGS) which offers real-time fund transfers and simple payment processes to support large value transfers between banks.
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Kenya: KCB Bank Kenya appoints CEO
Annastacia Kimtai has been appointed as the managing director of KCB Bank Kenya, becoming the first individual to hold the position separately. She has been serving as the acting managing director and the retail banking director since December. The move is aligned with the Central Bank of Kenya’s Prudential Guidelines on Corporate Governance, which requires separation of the management of subsidiaries from that of the holding companies.
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Cameroon: Local UBA subsidiary most profitable one outside Nigeria
UBA Cameroon closed the 2022 fiscal year with a net profit of 10.5 billion nairas ($25.5 million), up 17.5% compared to the previous year, driven by a 12% increase in its net banking revenue, which reached 40 billion nairas. The bank’s credit and public securities segments contributed to its balance sheet, which totaled XAF 559 billion ($1.02 billion) as of December 31, 2022. Despite a significant increase in operating expenses, UBA Cameroon’s financial results made it the most profitable subsidiary of Nigerian UBA group in Africa outside Nigeria.
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Google now prevents credit apps from accessing user data
Google has updated its Personal Loans policy for apps on Play Store, prohibiting apps offering personal loans from accessing sensitive data, such as photos, contacts, and call logs. The new policy applies to apps offering financial services and aims to comply with emerging regulations meant to take on predatory Digital Credit Providers (DCPs) particularly in Kenya, India, Indonesia, the Philippines, Nigeria, and Pakistan. Nonbanking financial companies in these countries must have only one digital lending app on the Google Play Store, and must comply with specific terms and conditions for financial apps to be allowed on the platform.
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Kenya: Egypt’s Commercial International Bank opens branch in Nairobi
Egypt’s Commercial International Bank (CIB) has opened its first branch in Nairobi, Kenya after acquiring Kenyan “Mayfair” Bank in January. The move is expected to strengthen bilateral relations between the two countries and reduce logistical obstacles for investors and businessmen on both sides. CIB is one of Egypt’s leading private sector banks and the first to enter the Kenyan market.
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Cote d’Ivoire: IFC partners with Bank of Africa for $77m SME finance facility
The International Finance Corporation (IFC) has invested $77m in a risk-sharing facility for the Bank of Africa Group, aiming to increase lending to small and medium-sized enterprises (SMEs), including women-owned businesses, in Ghana, Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, Tanzania, Togo, and Madagascar. The investment is expected to guarantee BOA Group 50% of a loan portfolio up to $154m, which will be distributed to businesses in the agriculture, trade, energy, construction, and other sectors. The investment is also supported by the Global SME Finance Facility (GSMEF) and Women Entrepreneurs Finance Initiative (We-Fi) among others.
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Uganda: dcfu Bank appoints new CEO
Charles M. Mudiwa has been appointed as the new Managing Director and CEO of dfcu Bank Limited, effective from 11th April 2023. With over 26 years of banking experience and a track record of successfully turning around businesses and increasing profitability, Mudiwa will lead the Bank at a critical time as it implements a customer-focused strategy to transform lives and businesses with innovative solutions and empowered people. Mudiwa is also known for being a staunch champion for gender and diversity.
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Kenya: Branch Microfinance remains branchless
Branch Microfinance, which acquired Century Microfinance Bank in 2020, will continue to operate as a branchless lender, despite being a micro-bank. The neobank, which closed two of its three branches following the acquisition, will maintain a single branch to serve as its headquarters, as required by law. According to Branch International Managing Director for East Africa Rose Muturi, the neobank has over four and a half million users, who rely on its digital platform and do not need physical branches.
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Kenya: Premier Bank of Mogadishu takes over First Community Bank
First Community Bank (FCB) has revealed a core capital shortfall of more than KES1bn ($9m), leading to its owners selling a majority stake to Premier Bank Limited of Mogadishu in a rescue deal for KES2.8bn. FCB’s core capital fell from KES1.65bn in September to negative KES331m in December, triggering a breach of the Central Bank of Kenya’s capital strength ratios. FCB has been in breach of capital ratios for the past five years and customer deposits dropped by 36% to KES13.74bn from KES21.48bn a year earlier.
Categories: Banks