Friday 22nd August 2014
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South Africa’s central bank has disagreed with a ratings decision by Moody’s to downgrade Capitec Bank Limited (Capitec) by two notches, and place it on review for a further downgrade. The central bank says it respects the independent opinion of rating agencies but that it does not “agree with the rationale given in taking this step”. Two reasons are given for the rating action: a lower likelihood of sovereign systemic support based on decisions recently taken in relation to African Bank Limited (African Bank), and heightened concerns regarding the risk inherent in Capitec’s consumer lending focus. “With regard to the first point, it is important to reiterate that the approach taken by the SARB to any resolution to address systemic risk will always be based on the circumstances and merits of the particular prevailing situation. Decisions will also be informed, as was the case with African Bank, by principles contained in the Key Attributes for Effective Resolution Regimes proposed by the Financial Stability Board (FSB), which have the objective that a bank should be able to fail without affecting the system,” notes the central bank in an official statement. “This is in keeping with evolving international best practice. In the case of African Bank bond holders and wholesale depositors are taking a 10% haircut, which is generally regarded as being very positive given that the trades following the announcement of African Bank's results were taking place at around 40% of par. Therefore in fact substantial support was provided, not reduced. Moreover, all retail depositors were kept whole and are able to access their accounts fully,” it adds - According to the Hong Kong Monetary Authority (HKMA) credit card receivables increased by 2.1% in the second quarter to HKD112, after a reduction of 6.7% in the previous quarter. The total number of credit card accounts edged up by 0.7% to around 16.8m.The rollover amount, which reflects the amount of borrowing by customers using their credit cards, increased by 2.9% during the quarter to HKD19.2bn. The rollover ratio also rose marginally from 17.0% to 17.1% in the same period. The charge-off amount increased to HKD569mduring the quarter from HKD528m in the previous quarter. Correspondingly, the quarterly charge-off ratio rose to 0.51% from 0.46% in the previous quarter. The amount of rescheduled receivables transferred outside the surveyed institutions’ credit card portfolios reduced to HKD94m from HK$109m in the previous quarter. The delinquent amount increased to HKD249m at end-June from HKD239m at end-March. However, the delinquency ratio remained the same at 0.22% because of an increase in total card receivables. The combined delinquent and rescheduled ratio (after taking into account the transfer of rescheduled receivables mentioned above) edged up to 0.29% from 0.28% during the same period - Harkand has been awarded a contract to support Apache with inspection, repair and maintenance work (IRM) as well as light construction (LC) across their assets in the North Sea, following completion of a competitive tender exercise. The award includes the provision of vessels, ROV and diving services for a three-year period, plus two one-year options. The firm will also support offshore marine construction contractor EMAS AMC who have been awarded a separate contract for pipe lay and heavy construction as part of the same tender process. Harkand Europe managing director, David Kerr, said: “This contract is an important step in strengthening our close working relationship and growing our North Sea business with Apache.

Global economic conditions hit Guernsey bank deposits

Friday, 15 June 2012
Global economic conditions hit Guernsey bank deposits The value of bank deposits in Guernsey fell £6.5bn (6.1%) in the first quarter of the year. http://www.ftseglobalmarkets.com/

The value of bank deposits in Guernsey fell £6.5bn (6.1%) in the first quarter of the year.

The total value of deposits held by banks in Guernsey was down to £101bn at the end of March 2012, a decrease of £11.8bn (10.5%) year on year. The quarterly report on banking sector activity from the Guernsey Financial Services Commission (GFSC) said that the overall fall in value of deposits was the result of both declining volumes and exchange rate factors.

In particular, sterling strengthened against the US dollar and euro but weakened against the Swiss franc, which had a negative effect on the level of deposits expressed in sterling. The overall currency mix shows that the proportion of deposits in sterling is 25.7%, US dollars is 47.2%, euro deposits 19.1% and Swiss franc deposits 3.3%.

 Fiona Le Poidevin, deputy chief executive of Guernsey Finance – the promotional agency for the Island’s finance industry, says: “It is disappointing to see this further decline in the value of deposits held by banks in Guernsey. Some of the fall was due to exchange rate factors but there was also a material drop in volumes as a result of the global trend of banks deleveraging in the face of uncertainties surrounding the eurozone, capital adequacy pressures and weak economic growth. 

“Due to current conditions, we continue to experience an unprecedented low interest rate environment which has a significant negative impact on the attractiveness of having funds on deposit in a bank and as such, investors are moving capital into other higher yielding products,” continues Le Poidevin. “However, on a more positive note, there have recently been more inquiries from banks which have expressed an initial interest in establishing operations in Guernsey. It is still very early days but it is encouraging news and of course, comes in the wake of the announcement by HSBC that it will be consolidating its Channel Islands private banking operations in Guernsey,” she adds.

“In addition, one of the great strengths of Guernsey’s finance industry is its diversity. Latest figures show that the value of investment funds being managed or administered in Guernsey was up nearly £9 bn in the first three months of the year. Also, during the first four months of the year, there has been net growth of 44 licensed international insurance entities, taking the total number to 731 at the end of April. Therefore, we can see that, in broad terms, Guernsey’s finance industry is performing robustly in what are difficult global economic conditions,” she continues.

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