Keen Zone

Main Menu

  • Home
  • Externality
  • Debt Sustainability
  • Venture Capital
  • Inventories
  • Loans

Keen Zone

Header Banner

Keen Zone

  • Home
  • Externality
  • Debt Sustainability
  • Venture Capital
  • Inventories
  • Loans
Debt Sustainability
Home›Debt Sustainability›African banks: no easy road to recovery – Fitch Ratings

African banks: no easy road to recovery – Fitch Ratings

By Anthony Lewis
December 27, 2021
0
0


Through Fitch reviews
Posted: December 27, 2021 5:55 PM

Fitch Ratings says the sector outlook for African banks in 2022 is neutral, with uncertain business conditions and the risk of Covid-19 limiting the recovery. We anticipate a slightly faster increase in lending, with most economies growing at the trend rate and banks gradually easing stricter underwriting standards / in the era of the pandemic. Our baseline scenario also takes into account the risks to global growth, relatively high commodity prices and still favorable external financing conditions.

We see significant uncertainty, Africa being particularly threatened by the new variants of Covid-19, in a context of very low vaccination rates and limited budgetary space for governments. If this risk materializes, it could radically change the outlook.

“Banks are susceptible to mistakes in pursuing growth under current operating conditions, which are fraught with challenges and uncertainties. We believe that a return to normalization will be beyond 2022. Even ruling out the serious threat of further variants, banks face the prospect of limited profit growth and hence loss absorbing capacity. limited, ”says Mahin Dissanayake, Head of African Banks at Fitch.

The rate of downgrades has significantly decreased in 2021 compared to the previous year. Barring significant downside risks, we expect these trends to persist into 2022.

All else being equal, we do not expect the deterioration in asset quality to be widespread, even with the removal of the remaining government support measures. The rapid rebound in formal and informal economic activity in 2H20 and 2021, high commodity prices and the resilience of some economic sectors and loan restructuring continue to contain bad debts of businesses. The high unemployment rate and the resulting impact on personal loans remain a risk. The rapid accumulation of government debt securities by banks presents a major risk as the emphasis is placed on sovereign debt sustainability.

The full report, “African Banks 2022 Outlook: No Easy Road to Recovery” is available at www.fitchratings.com or by clicking on the link above.


Related posts:

  1. Janet Yellen’s New Monetary Multilateralism by Paola Subacchi
  2. UPDATE 1-Citigroup Affords Speedy In-Dwelling COVID-19 Assessments for Chosen U.S. Staff
  3. Kind 8.3 – Willis Towers Watson plc
  4. Chart: Hovering commodity costs go away rising currencies adrift
Tagsdebt sustainability

Categories

  • Debt Sustainability
  • Externality
  • Inventories
  • Loans
  • Venture Capital

Recent Posts

  • Student loan interest rates drop again as inflation and cost of living soar | Student funding
  • City bans New Hampshire church home prayer meetings
  • Navigating Sri Lanka’s rocky road to recovery
  • Liberty Media Leads $100M Funding Round For Sports Channel Gen Z Overtime As Bezos And Morgan Stanley Raise The Stakes
  • Z5 Inventory Announces Outstanding Health Care Inventory Awards at AHRMM22 Conference
  • Terms and Conditions
  • Privacy Policy