Saturday 30th August 2014
slib33
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.

Citadele Bank repays Latvian state term deposit ahead of schedule

Wednesday, 15 February 2012
Citadele Bank repays Latvian state term deposit ahead of schedule Citadele Bank has repaid the whole sum of €203.7m of the Latvian State term deposit to the Ministry of Finance. These funds were repaid in instalments over one-and-a-half years, and the total sum was repaid earlier than planned. Citadele paid €14.7m in interest to the State for using the deposit between August 2010 until February 2012. http://www.ftseglobalmarkets.com/

Citadele Bank has repaid the whole sum of €203.7m of the Latvian State term deposit to the Ministry of Finance. These funds were repaid in instalments over one-and-a-half years, and the total sum was repaid earlier than planned. Citadele paid €14.7m in interest to the State for using the deposit between August 2010 until February 2012.

Citadele Bank has repaid the whole sum of €203.7m of the Latvian State term deposit to the Ministry of Finance. These funds were repaid in instalments over one-and-a-half years, and the total sum was repaid earlier than planned. Citadele paid €14.7m in interest to the State for utilising the deposit between August 2010 and February 2012.

The last instalment, €46.94m, was transferred to the State Treasury on February 14th, of €340,000 interest.  “The bank has acquired certain trust in people’s eyes in order to attract the necessary funds for repaying State deposit and ensuring liquidity. Now Citadele will have to prove that it can increase its value regardless of the volatility that exists in European financial markets so that it can be handed over to private shareholders, recovering the funds invested in its share capital, within a reasonable period,” claims economy minister Daniels Pavļuts.

“Having repaid the State term deposit, our team will now continue developing Citadele in a well-considered manner focused on long-term cooperation with our clients. We will continue increasing the bank’s liquidity and we will concentrate on a solid and profitable asset structure,” says Juris Jākobsons, chairman of the Board of directors of Citadele Bank.

Up to now, “Citadele has especially promoted deposit products ...  [which] are the main source of funding for the bank,” explains Jākobsons, which has enabled the bank to “issue new loans worth LVL 151m in 2011 in Latvia. This is 10% of the total amount of newly issued loans in the local banking sector. In 2012 we will continue funding the Latvian economy paying special attention to small and medium enterprises, and facilitating utilisation of resources available from the EU structural funds. We will also continue working on introducing new products and services tailored to the needs of clients. Every Lat deposited with Citadele is invested in the Latvian economy, and it continues working for the benefit of the national economy.”

Apart from the term deposit Citadele Bank also has a subordinated loan worth €64.3m granted by SJSC “Privatization Agency”. Citadele has paid €11.4m in interest for this loan between September 2010 and February 2012 to the Latvian State. The state’s share in the bank’s capital is worth some LVL77.2m  (around € 109.8m), which eventually will be sold off to recover its funds.

The bank, which was founded at the end of July 2010 is majority owned by the country's SJSC Privatisation Agency; while 25% plus one share is held by the EBRD. The bank claims to be trading profitably.

Related News

Related Articles

Related Blogs

Related Videos

  • Forces shaping the UK pension industry Thursday, 18 October 2012 Forces shaping the UK pension industry
    Rosalind Knowles, partner, Linklaters Pension Practice Group provides the first Keynote Speech at FTSE Global Markets’ Transition Management conference at Gibson…
  • Investing in Russia (Part 1) Friday, 01 July 2011 Investing in Russia (Part 1)
    Mattias Westman, founding partner, Prosperity Capital Management, discusses the key challenges and opportunities of investing in Russia during the Accessing…
  • Russia's derivatives and FX markets Friday, 01 July 2011 Russia's derivatives and FX markets
    Tim Bevan, director, global electronic trading services, Otkritie Securities Ltd discussed the Russian derivatives and FX markets during the Accessing…

Tweets by @DataLend

DataLend is a global securities finance market data provider covering 42,000+ unique securities globally with a total on-loan value of more than $1.8 trillion.

What do our tweets mean? See: http://bit.ly/18YlGjP