By Huw Jones

LONDON (Reuters) – The safety buffers of banks in the European Union would swell by billions of euros under proposed rules that allow lenders to include the value of software investments like cybersecurity in capital calculations.

Currently a bank must deduct the value of software from its capital buffer upfront, adding 36 basis points to its core ratio or mandatory measure of stability.

The European Banking Authority (EBA) said banks will be allowed to “amortise” or taper the value of software for capital purposes over three years.

That would boost capital by about 20.2 billion euros in 2020 across a sample of 64 banks, and by 20 billion euros in 2021, it said.

“The proposed approach is designed to be simple to implement and applicable to all institutions in a standardised manner, as is the case today with the deduction treatment,” the EBA said in a statement

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(Bloomberg) — Gulf banks are entering an age of weaker profits as a result of the coronavirus outbreak and a decline in crude prices, according to S&P Global Ratings.

“The pandemic and drop in oil prices could mark the start of a new era,” S&P analysts led by Mohamed Damak in Dubai said in a report. “This new era is characterized by a decline in oil wealth, a lower multiplier effect in the local economies, and lower profitability.”



chart, bar chart


© via Bloomberg


With a sluggish economic recovery likely to hold back lending in the six-member Gulf Cooperation Council, a period of reduced profitability could be “longer lasting,” according to S&P. The rating company also predicts that regional banks’ asset quality may deteriorate at a faster rate.

“Rated banks in the GCC face an uphill struggle in the next 18 months due to the protracted nature of the economic recovery and the

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The gap between big Nigerian banks and their mid/small counterparts in terms of asset and profitability has continued to widen, an analysis by TheCable has shown.

Guaranty Trust Bank Plc, the largest lender by market capitalisation, has an average return on equity (ROAE) of 26.0 percent, Zenith Bank has 21.7 percent, and Access Bank 19.1 percent as at June 2020.

That compares with the ROAE of the largest Tier 2 lenders: FCMB (9.40 percent); Fidelity (12.90 percent); Union Bank (8.40 percent); Sterling (8.72 percent), and Wema, (5.42 percent).

Unity Bank has a negative ROE of 0.742 percent as its net income for the period under review was not enough to wipe out the negative shareholders’ fund of N278.24 billion.

Return on average equity (ROAE) refers to performance metrics that assesses of a company based on its average shareholders’ equity outstanding

Also, the combined total assets of the five Tier 1

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By Liz Lee and Scott Murdoch

KUALA LUMPUR/HONG KONG (Reuters) – Malaysian rubber glove maker Top Glove Corp Bhd

, riding a wave of demand generated by the coronavirus outbreak, has hired banks to arrange a Hong Hong listing that could raise at least $1 billion, two sources said.

Citigroup

, China International Capital Corporation (CICC) <3908.HK> and UBS

, will manage the listing, said the two sources, who have direct knowledge of the matter but can’t be named as the information is not yet public.

Another source, also declining to be named as the process is private, said the world’s largest glove maker could be more ambitious and look to raise as much as $2 billion.

The company, which is already listed in Malaysia and Singapore, in a filing to the Kuala Lumpur exchange on Monday said it is evaluating a dual primary listing on Hong Kong’s stock exchange.

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Oct 13 (Reuters)Societe Generale’s updated FX forecasts for 2021 recognise that Covid-19 has changed everything. Countries that had been timid about fiscal expansion have embraced it, and the Federal Reserve’s aggressive response should mean the dollar is beginning a downward adjustment, now that it’s lost its interest rate yield.

The bank expects EUR/USD to trade in a 1.20-1.30 range as the European Union’s recovery fund helps boost long-term confidence that monetary policy won’t be the “only game in town” to support growth.

Soc-Gen expects USD/JPY below 100.00 in 2021. Japanese policy delivered an undervalued JPY with the help of negative nominal rates, large-scale asset purchases and yield curve control, it said, but those policies only work if they aren’t adopted everywhere.

For GBP, the bank says its only protection is that in real terms, pessimism about the outlook for the currency has kept the pound weak. GBP/USD should

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By David Lawder

WASHINGTON (Reuters) – Some G20 creditor countries are reluctant to broaden and extend another year of coronavirus debt service relief to the world’s poorest countries, so a six-month compromise may emerge this week, World Bank President David Malpass said on Monday.

Malpass, speaking to reporters as the World Bank’s and International Monetary Fund’s virtual annual meetings get under way, said G20 debt working groups have not reached agreement on the two institutions’ push for a year-long extension of the G20 Debt Service Suspension Initiative (DSSI).

“I think there may be compromise language that may be a six-month extension (and) that it can be renewed depending on debt sustainability,” Malpass said.

Finance ministers and central bank governors from the G20 major economies are scheduled to meet by videoconference on Wednesday. In May, they launched an initiative to allow poor countries to suspend payments on official bilateral debt owed

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By Winni Zhou

SHANGHAI, Oct 12 (Reuters)China’s move to cool a rising yuan stands little chance of stopping further gains, international banks say, as the strength of the world’s number two economy and a near-record yield advantage drive big and steady inflows.

Over the weekend, the People’s Bank of China (PBOC) scrapped a requirement for banks to hold a reserve of yuan forward contracts, removing a guard against depreciation and sending the currency down 1% for its steepest drop since March.

Yet an identical move three years ago ultimately proved ineffective, and investors say this time the conditions are even more likely to buoy the yuan, perhaps as far as 6.5 per dollar.

“In all previous instances, the impact of the regulatory change was temporary,” said Eugenia Victorino, head of Asia strategy at Swedish bank SEB in Singapore.

“We continue to expect the yuan to remain on

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General view of the Bank Of England on September 27, 2020 in London, England.


  • The Bank of England has written to British banks, seeking information on how ready they are for monetary policy that adopts negative interest rates.
  • “We are requesting specific information about your firm’s current readiness to deal with a zero bank rate,” Sam Woods, the central bank’s deputy governor, wrote in Monday’s letter.
  • The bank survey was not marked as mandatory, but the BoE said it would help give officials a broader understanding of risks and potential issues.
  • The central bank is not currently employing a zero, or negative, interest rate. The base rate is 0.1%.
  • Visit Business Insider’s homepage for more stories.

The Bank of England appears to be moving closer to adopting negative interest rates, after writing to UK commercial lenders on Monday to ask how ready they are for sub-zero

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The Supreme Court has always upheld the law and stood for fairness and equity, something that the country is justifiably proud of. In the quest for fairness though, it is possible that the lines drawn by the founding fathers of the Constitution separating powers between the legislature, executive and the judiciary are sometimes crossed, inadvertently. This is something that the Court needs to be watchful of as it hears the case relating to moratorium on loan repayments by Covid-affected entities and whether ‘interest on interest’ is justified. The arguments being advanced in this case seem to be getting more and more divorced from the ground realities of commercial banking. The petitioners are persistent that banks, which have already granted borrowers six months’ time to service their loans to tide over Covid, ought to extend this privilege longer and waive interest as well. They have also implied that banks are morally

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a group of people sitting at a table


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A major hack that compromised Uganda’s mobile money network has plunged the country’s telecoms and banking sectors into crisis.

The Oct. 3 hack was a result of a security breach on a consumer finance aggregator, Pegasus Technologies, which mainly affected bank to mobile wallet transfers, according to an Oct. 8 statement by MTN Uganda, the country’s largest mobile phone company. Kampala-based Pegasus Technologies provides financial and billing solutions for various companies including all the affected entities.

At least $3.2 million is estimated to have been stolen in this latest incident with some reports quoting a much higher figure. The hackers used around 2,000 mobile SIM cards to gain access to the mobile money payment system, according to local papers. They then instructed the banks to transfer millions of dollars to telecommunication companies who then paid out mobile money to these different SIM cards across the country.

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