Union Bank of Nigeria has received a $30m loan from the International Finance Corporation (IFC) to boost trade financing and working capital lending to Nigerian firms. The funding will allow the bank to extend lending to businesses in food, healthcare, manufacturing, and services sectors. The loan from IFC, made through its COVID-19 Emergency Response Working Capital Solutions Envelope, will help Union Bank’s customers during the economic impacts of COVID-19. IFC has an investment portfolio of $2.3bn in Nigeria across several sectors.
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Ethiopia: Government sends cash to banks in war-torn Tigray region
The Ethiopian government is sending over $90 million to Tigray and restoring banking services to the war-torn region. National Bank has started sending 5 billion Birr to Mekele, and Ethiopian Airlines has increased flights to the region from 3 to 5 per day. This follows a peace deal agreed in November to end the two-year conflict between the federal government and the Tigray People’s Liberation Front. The TPLF agreed to disarm and return federal government control in exchange for access to Tigray. Some aid deliveries have resumed since the deal.
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Ethiopia: CBE continues its growth
The Commercial Bank of Ethiopia recorded a profit of Birr 13 billion and collected Birr 58.7 billion in revenue over the past six months. The bank’s assets reached Birr 1.2 trillion and it opened 55 new branches, bringing its total number to 1,879. CBE also acquired USD 1.7 billion in foreign currency, exceeding its target for the period, and saw an increase in ATM and mobile banking users to 8.8 million and 6 million, respectively. The bank had a profit of Birr 27.5 billion in the 2021/2022 fiscal year.
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Ethiopia: Bank of Abyssinia modernizes its software platform
Newgen Software has partnered with Bank of Abyssinia to automate the loan origination process for its retail and small to medium enterprise loans. The platform, NewgenONE, will streamline loan processing, disbursement, and tracking with business rule engine, document management, and workflow management capabilities. The solution will be used in more than 750 branches in Ethiopia and will allow the bank to respond faster to customer requests and digitize its loan process, enhancing the overall customer experience.
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Uganda: MFIs want recognition as microfinance banks
Microfinance institutions and money lending firms in Uganda are pushing to be recognized as microfinance banks. They argue that this recognition will give them visibility and trust among the clients they serve. Currently, all microfinance institutions are categorized as microfinance deposit-taking institutions (MDIs) and divided under four tiers. By being recognized as microfinance banks, they will be able to mobilize resources which can be used to bring down the current high interest rates. The institutions will build consumer confidence and improve the saving culture among Ugandans. However, there are concerns about the institutions being able to handle the added pressure of operating as banks and meeting the capital demands.
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Ghana: Fintech should focus on financial inclusion
The Bank of Ghana has encouraged financial technology companies to invest in traditional financial services such as “susu” operations and to target tech-savvy youth. The central bank believes that this could increase financial inclusion and support economic stability. The Bank of Ghana will work with fintechs to ensure financial services are available to all Ghanaians and a conducive regulatory environment will be provided. The Growth Director of Taptap Send, Africa, has called for the government to relax regulations and restructure its tax policies for the fintech industry.
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Kenya: Gov’t considering launch of ‘green’ bank
Kenya is planning to establish a bank to handle investments in green projects only. The bank will develop credit guarantee instruments and schemes to enhance access to finance for green investments. The government requires at least 2.4 trillion shillings to implement green projects by 2030 and aims to cut greenhouse emissions by at least 32% within seven years. The proposed bank is expected to reduce investment risks in the sector and supplement government investment in priority projects.
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Kenya: Equity Bank to restructure portfolio it acquired from Spire Bank
Equity Bank has unveiled plans to restructure the Sh945 million loan book it has acquired from Spire Bank. Equity Group CEO James Mwangi said they are willing to enter into discussions on restructuring with the 3700 Spire Bank customers who have loans to allow them to settle their dues and retain their securities. The restructuring will allow the lender to match assets and liabilities acquired to offset customer obligations. The announcement comes after the completion of the bank’s acquisition of certain assets and liabilities of Spire Bank.
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Ethiopia: Financial liberalization won’t be an easy process
Ethiopia is seeking to open its banking sector to new entrants, but the process will not be easy. The country’s central bank has imposed strict regulations to ensure stability, including requirements for minimum capital and a ban on microfinance institutions. In addition, state-owned banks still dominate the market, which may make it difficult for new entrants to compete.
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South Africa: BCG report says traditional banks need to grow digital offering
Retail banking in South Africa is evolving rapidly due to the COVID-19 pandemic, with about 80% of consumers preferring to do their day-to-day banking digitally, according to a report by Boston Consulting Group (BCG) in partnership with Discovery Bank. BCG suggests that traditional banks may struggle to meet new digital expectations and compete with new, more agile challenger banks like Tyme Bank and Bank Zero. However, the report also suggests that traditional banks could leverage their data to understand customer needs and use AI models to predict their needs before they arise.
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Nigeria: Moody’s downgrades debt ratings of several banks
Moody’s has downgraded the long-term deposit ratings, issuer ratings, and senior unsecured debt ratings of nine Nigerian banks including Guaranty Trust Bank, Zenith Bank, and First Bank of Nigeria. The ratings were lowered to Caa1 from B3. The downgrade reflects a combination of Nigeria’s weakened operating environment and the interlinkages between the sovereign’s weakened creditworthiness and the banks’ balance sheets, according to Moody’s. The banks have significant exposure to the Nigerian government, with 28% of their aggregate assets in government debt as of June 2022. The outlook on the long-term ratings is stable.
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Ethiopia: CBE launches remittance app
Commercial Bank of Ethiopia has launched Ethio Direct, a digital remittance app for the Ethiopian diaspora in Canada, Israel, USA, Italy, South Africa, Sweden, UAE, UK, and Saudi Arabia. The service allows users to send dollars to Ethiopia with international payment cards, from $5 to $1,000, and is available for download from the App Store and Play Store.
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Uganda: State-owned banks undercapitalized?
Tropical Bank and Post Bank, two financial institutions owned by the government of Uganda, are running out of capital, according to the country’s Auditor General. The Financial Institutions (revision of minimum capital Requirements) Instrument, 2022, requires banks to have a minimum paid-up capital of at least Shs120bn ($32.7m) by the end of 2022. Tropical Bank currently has a paid-up capital of Shs88bn, while Post Bank has Shs98bn. Post Bank has responded that it will comply with the minimum capital requirement and does in fact have a paid-up capital of Shs112bn.
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Nigeria: UBA appoints first female CEO, Abiola Bawuah
The United Bank for Africa (UBA) has appointed Abiola Bawuah as CEO, the first woman to hold the role. Bawuah was previously regional CEO for West Africa, supervising the bank’s operations in nine countries. The UBA Group has also made several other executive appointments, including Chris Ofikulu as regional CEO for West Africa, Uzoechina Molokwu as deputy managing director of UBA Ghana, and Ayokunle Olajubu as managing director/CEO of UBA Liberia. Theresa Henshaw was appointed CEO of UBA UK and Samuel Oni retired from the board after eight years.
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Senegal: Opposition leader calls for creation of diaspora bank
Khalifa Ababacar Sall, president of Taxawu Senegaal, expressed support for the creation of a bank for the diaspora while speaking in Italy during his “Mottalli Yéene” tour ahead of the 2024 presidential election. He views the diaspora as a valuable asset to the country’s development and believes that a bank for the diaspora would allow immigrant nationals to contribute to the economy. He also highlighted the need for change in the way immigration is viewed and for members of the diaspora to actively contribute to the country’s development.
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Ecobank Group was declared “Best Employer in Africa 2022” by the organization “Best Company”. The award recognizes the group’s commitment to promoting diversity and inclusiveness in the workplace, as well as its focus on employee training and development. Ecobank has operations in 36 African countries and employs over 15,000 people.
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Kenya: Equity Bank to take over Spire Bank
Equity Bank Kenya will acquire certain assets and liabilities of Spire Bank Limited, after getting approvals from the Central Bank of Kenya and National Treasury. The acquisition will offer a lifeline to the struggling lender and will acquire 20k depositors and 3,700 loan customers. Spire Bank has been struggling with defaulting on all Central Bank of Kenya ratios and posted a Sh403 million net loss in H1 2022.
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Ghana: Slow progress on domestic debt exchange
Ghana’s Domestic Debt Exchange (DDE) program, launched in December 2022, aims to restructure the country’s debt and access a $3 billion loan from the International Monetary Fund. Despite slow progress, the deadline for bondholders to sign up for the program has been extended several times to January 31st. The government and the Ghana Securities Industry Association have recently reached an agreement on the terms of participation by capital market operators in the program, which will have improved terms. Bondholders have been skeptical due to lack of clarity surrounding the terms.
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Kenya: Commercial International Bank acquires Mayfair Bank
Commercial International Bank (CIB) of Egypt has acquired a 51% stake in Mayfair Bank in Kenya, its first acquisition outside of Egypt. The acquisition is in line with the bank’s African expansion strategy and the country’s efforts to strengthen ties with African neighbors. CIB CEO Hussein Abaza praised the acquisition and said the bank sees promising opportunities in the Kenyan economy. Mayfair Bank Executive Director Hossam Rajeh said the bank is excited to be a part of Kenya’s economic system and to provide the best banking services.
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Nigeria: Bank customers lost more than naira 1 billion to fraud in 3 months
Customers of Nigerian banks lost over N1bn ($2.7m) to fraud via bank branches and mobile channels in Q2 2022, according to a report by the Financial Institutions Training Centre (FITC). FITC recorded 67,878 fraud cases during the period, with a decline in the amount of fraud compared to Q1 2022. The amount lost via the web channel declined significantly, while the amount lost through the bank branch and mobile channels increased by 497.56% and 65.74%, respectively. FITC advised banks to improve their internal control measures to prevent fraud.
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South Africa: Insiders sell shares
Insiders of South African bank Capitec Bank Holdings (JSE:CPI) have sold more shares than they have bought in the last year, with CEO Gerhardus Fourie selling R56m worth of shares at a price of R2,131 each. Insiders currently own 20% of the company, worth R42b. The last three months have seen no insider transactions. While a high insider ownership suggests the company is run in the interest of all shareholders, there is a lack of confidence in the insider transactions, and more insider buying is desired.
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Nigeria: Central bank extends timeline for old naira notes
Nigeria’s central bank has extended the deadline for citizens to turn in old naira notes. The original deadline was January 31, but has now been pushed back to February 28. The move is part of a larger effort by the bank to phase out older notes and replace them with updated versions.
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Kenya: Odhiambo appointed managing director at National Bank of Kenya
KCB Group has announced that George Odhiambo, the current managing director of BPR Bank Plc Rwanda, will take charge of the National Bank of Kenya. He joined KCB Group in Rwanda in 2009 and has been credited with turning around the bank’s operations, and was appointed managing director of BPR Rwanda in April 2022, where he has been leading the merger operations.
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DR Congo: GFIBank obtains ISO 9001 certification
GFIBank RDC, a subsidiary of BGFIBank Group, has recently obtained ISO 9001 v.2015 certification from BUREAU VERITAS, an internationally renowned company specialized in certifying to international standards. This certification recognizes the effectiveness of the quality management system put in place by BGFIBank RDC, and is part of the company’s “Dynamique 2025” project. BGFIBank RDC aims to position itself as a major player in the development of innovative digital banking products and services by 2025.
Categories: Banks