Echelon’s Post

People's Bank Sri Lanka, the second-largest bank in Sri Lanka, on Sri Lanka's economic performance and prospects. The bank's CEO Clive Fonseka shares insights that you can read about here: https://lnkd.in/gmkez5td

De novo or new banks in Ethiopia must not lose, at least, their shareholders' principal investment, under any pretext. Their performance need to go way above breakeven. Losing shareholders' principal investment, which has a hefty consequence, must be avoided at all cost. Returning profit is what the times require from De novo and new banks and that is what their prime duty should be. From the standpoint of the interest of their shareholders, if all fails, these banks must earn the basic Savings Deposit rate. Profit is also necessary, in the interest of the new banks' themselves which are obliged to do continuous recapitalization of profit for meeting the new regulatory Birr 5 billion capital, in due course. Besides, making profit and recapitalization is the only sure way that saves these banks from capital and shareholder value erosion arising from the snowballing inflation and continuous crawling currency depreciation. The governance system of these banks must focus in correcting the loss event fast and double-time. And the regulator, I believe, through suasion and other means as appropriate, should also cajole these new banks to avoid this consequential and hurtful performance, going forward. After all, no bank would have been given license in the first place, if it has shown loss and, substantial one at that, in its formation feasibility study.

https://lnkd.in/gsiYkZ9n Managing NOP - Sri Lankan Banks As Sri Lanka emerges out of an economic crisis, Banking System becomes one of the most important catalysts to propel the next phase of growth for the economy, thereby becoming one of the key sectors where stability is of paramount importance. NOP (Net Open Positions) becomes an important element for banks to manage, as the country gradually opens to international trade.  Defining NOP in the context of banking and finance refers to the difference between the total open long (buy) positions and the total open short (sell) positions that a financial institution has in a single currency or a portfolio of currencies. While the country has a very limited window for “pure speculation”, efficient management of NOP by the banks will facilitate smooth international trade and payments operations and more importantly, rebuild international community confidence in the Sri Lankan Banking & Financial System. NOP has become a key component in the banking sector for 3 main reasons. (i) Risk Assessment – Identification and mitigation of FX risk exposures. (ii) Strategic Decisions – Make informed decisions on Treasury Management, Currency Trades, Hedging Strategies and Capital Allocations. (iii) Regulatory Compliance – Prevents excessive risk taking through monitoring and imposing pre-set parameters for banks to preserve stability. Therefore, it is imperative that all relevant stakeholders prioritize this key functional element of the Banking and Financial System of Sri Lanka (and happy to see the attention!), that will allow the entire economy to manage and navigate through much needed international trade volumes towards growth.

Capital Allocation: The Crucial Role of Banks Banks are instrumental in the efficient allocation of capital, a process essential for economic growth and development. Banks in Pakistan need to somewhat move away from PIB Banking to the heart and soul of Banking to play a more meaningful and central role in our economy. In the US market, their roles span multiple critical functions that collectively drive the economy forward.First, banks facilitate investment in business growth and innovation. By providing loans and credit lines, banks enable businesses to expand, hire more employees, and boost production. Institutions like JPMorgan Chase and Bank of America support small businesses and SMEs, while Silicon Valley Bank focuses on financing technology startups and biotech firms, fostering innovation and technological advancements. Additionally, banks are key players in supporting infrastructure projects. They fund large-scale public works, such as highways and bridges, through municipal bonds and project financing. Goldman Sachs, for example, has been involved in financing various infrastructure projects nationwide. In the energy sector, banks like Wells Fargo finance renewable energy projects, contributing to the shift towards sustainable energy sources.Banks also enhance consumer spending, a significant component of the US economy. Mortgage lending by institutions such as Wells Fargo and Quicken Loans facilitates home purchases, stimulating the real estate market. Furthermore, consumer credit products offered by banks like Citibank and Capital One enable increased consumer spending, driving economic activity. The stability of the financial system is another area where banks play a vital role. They manage financial risk through investment products and services, such as derivatives and hedging strategies. By providing liquidity through lending and borrowing mechanisms, banks ensure the smooth functioning of the financial system, even during economic downturns. Lastly, banks promote economic inclusion by providing access to banking services for underbanked and unbanked populations. Financial literacy programs and accessible banking products help integrate more individuals into the formal economy. Banks in the US are crucial for capital allocation, supporting business growth, innovation, consumer spending, financial stability, and economic inclusion. Their multifaceted role underscores the importance of a robust banking sector in maintaining a healthy and dynamic economy. We in Pakistan need to learn and follow some of those and other global best practices to transform our banking sector. State Bank of Pakistan (SBP) Pakistan Banks' Association Pakistan Microfinance Network World Economic Forum The World Bank Asian Development Bank (ADB) IFC - International Finance Corporation Islamic Development Bank (IsDB) #FinancialInclusion

The assets of Uzbekistan's banking sector reached the mark of 648.6 trillion soums ($51.3 billion) as of March 1, 2024, which is 15% higher year-on-year. Foreign currency accounts for 44%, or 285.3 trillion soums ($22.5 billion), of the total assets. The volume of credit investments by banks in Uzbekistan grew by 19% during the reporting period and amounted to 472.4 trillion soums ($37.4 billion). Of the total volume of credits, 44% falls on foreign currency. Bank deposits reached 237.9 trillion soums ($18.8 billion) which is 13% more year-on-year. Deposits in foreign currency exceeded 68.1 trillion soums ($5.3 billion). The total capital of the banking sector of Uzbekistan totaled 99.05 trillion soums ($7.8 billion), which represents an increase of 21% cover year (400 billion soums or $31.6 million in foreign currency). The loan portfolio of non-bank credit organizations has grown from 4.24 to 8.05 trillion soums (from $336.4 million to $638.7 million) over the past 11 months, and their share in the total banking and financial system has grown from 1% to 1.7%. #uzbekistan #banking #nonbank #financial #system #growth

22 August, 2024 Daily Market Report Bank credit growth slows, while deposits rise by 13% YoY to $52 billion Cambodia's banking system remains strong in capital and liquidity, but credit quality and profitability have declined. In the first half of 2024, loans grew by 2.6% to 238.1 trillion riels ($59 billion), while deposits rose by 13.4% to 209.9 trillion riels ($51.9 billion). To Read More Reports: https://lnkd.in/gKRxSSvZ #YuantaSecurities #DailyMarketReport #CambodiaCapitalMarket

Nigeria’s FUGAZ banks navigate 2023 headwinds with N9.6trn gross earnings Nigeria’s banking sector, navigating through a perfect storm of economic headwinds, steered a very profitable course and rewarded their shareholders with impressive returns in the 2023 financial year, according to a review of the reports turned in by the country’s biggest banks in the last few weeks. 2023 marked a pivotal point in Nigeria’s banking sector, as the country’s financial institutions faced an uphill battle against economic instability, grappling with a myriad of challenges brought about by diverse factors. These included the steady rise of inflation, the adverse impact of global events on the economy, domestic market imbalances, inflexible economic structures, amid policies that sent ripples of unintended consequences throughout the domestic macroeconomic landscape. https://lnkd.in/dzp_tmbF

"World’s Best Banks 2024—Africa | Global Finance Magazine" https://lnkd.in/ewXJ6CQQ Congratulations to all the management and employee staffs of Awash Bank ...Awash Bank has won the Global Finance Award as one of the best banks in Africa for the third time in a row ...The achievements listed are opening 150 new branches,commanding a 20 percent market share in assets,18 percent in deposits and loans,16 percent in customer base.....The objective parameters include profitability,asset growth,geographic reach,strategic relationships,new business developments and product innovation..The subjective parameters include opinion of equity analysts,credit rating analysts,bank advisors and others opinion who are working in the banking industry...

𝐑𝐞𝐚𝐝 𝐭𝐡𝐞 𝐥𝐚𝐭𝐞𝐬𝐭 𝐫𝐞𝐬𝐞𝐚𝐫𝐜𝐡 𝐩𝐚𝐩𝐞𝐫 𝐣𝐮𝐬𝐭 𝐩𝐮𝐛𝐥𝐢𝐬𝐡𝐞𝐝 𝐢𝐧 𝐈𝐉𝐌𝐑𝐄𝐒, 𝐕𝐨𝐥𝐮𝐦𝐞 𝟏𝟒 (𝟏), 𝟐𝟎𝟐𝟒 𝐈𝐧 𝐏𝐚𝐤𝐢𝐬𝐭𝐚𝐧, 𝐭𝐡𝐞 𝐂𝐡𝐨𝐢𝐜𝐞 𝐨𝐟 𝐑𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭𝐬 𝐟𝐨𝐫 𝐈𝐬𝐥𝐚𝐦𝐢𝐜 𝐄𝐚𝐬𝐲 𝐇𝐨𝐮𝐬𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐧𝐠 𝐛𝐲 𝐌𝐞𝐞𝐳𝐚𝐧 𝐁𝐚𝐧𝐤 Islamic Easy House Financing (IEHF) increased from RS. 6.8 billion to RS 23.3 billion over 10 years. Identifying the factors that affect the satisfaction of both Muslim and non-Muslim clients with Islamic Easy House Financing (IEHF) is significant. This research then considers the major variables that impact Pakistan's choice of Islamic Easy House Finance (IEHF). Questionnaires were distributed to 160 employees of Meezan Islamic Bank. The current study employed a testing strategy called random sampling. The questionnaire was divided into two segments. One segment included data about the segments, while the other segment focused on the factors that influence how Muslims finance their Islamic Easy House (IEHF). The results demonstrate that several significant variables impact the choice of Islamic Easy House Financing (IEHF), including circumstances, management quality, integrity, prominence in the media, and social impact. The most reliable indication is reputation, as most customers feel comfortable choosing Islamic Easy House Finance (IEHF) because Islamic Meezan Bank has a strong reputation and vision. The study needs to be completely structured. The focus also refers to representatives of a single financial institution. Future research may involve personnel from various Islamic financial institutions. Policymakers and directors could use the tests suggested in the current study as a guide for enhancing Islamic Meezan Bank products and services. There will be an article published on Pakistan's Meezan Islamic Bank as part of the study. This research is the first to examine Pakistan's easy-house-choice Shari'ah laws. For experts and scholars concerned about advancements in Pakistan's Meezan Islamic Bank's banking sector, the findings made throughout this research process will be of the utmost importance. 𝑻𝒉𝒆 𝒇𝒖𝒍𝒍 𝒑𝒂𝒑𝒆𝒓 𝒄𝒂𝒏 𝒃𝒆 𝒅𝒐𝒘𝒏𝒍𝒐𝒂𝒅𝒆𝒅 𝒇𝒓𝒐𝒎 𝒕𝒉𝒆 𝒇𝒐𝒍𝒍𝒐𝒘𝒊𝒏𝒈 𝒍𝒊𝒏𝒌. https://lnkd.in/dGQqQeNf #islamic #house #financing #meezan #bank

Nigerian Banks' Recapitalization and SMEs' Struggle 🏦 📍As the deadline for recapitalization approaches, there has been a plethora of activities in the Nigerian banking sector, ranging from share issues, M&A discussions to possible considerations around license downgrades for Banks to be able to meet up with the requirements and remain standing. 📍This is happening at the same period when the Central Bank of Nigeria (CBN) is pursuing a contractionary monetary policy stand to curb inflation which made the past three quarters of the year witness MPR increase up to 26.75%, leaving SMEs in a tight corner due to higher lending cost. 📍There have been different perspectives from experts via media and other platform on the recapitalization exercise; the bigger picture, and the hope for the economy. 📌This centered around the need for the exercise as a whole and the potential gains that lie in wait... ☑️At the beginning of the year, even before the recapitalization announcement, the capital adequacy ratio of the industry was 13.7%, which was above the prudential threshold of 10%. ☑️Non-Performing Loans (NPL) for total loan assets was 4.81%, below the prudential stipulation of 5%, and ☑️The liquidity ratio stood slightly above 40%, which is also above the prudential minimum of 30%. 📌However, looking at it from an exchange rate perspective; 💵 In 2004/2005, when the major recapitalization occurred, the capital base was moved from ₦2 billion to ₦25 billion, and the exchange rate was around ₦125/ $ which is $200 million when expressed in USD. 💵As of last year, the capital base being at ₦50 billion, exchange rate was around ₦500/$, that would give you $100 million, which is lower than what it was in 2005 due to naira depreciation. 💵Pegging the capital base in 2024 at ₦500 billion with the YTD average exchange rate at ₦1500/$ actually puts us in a better position internationally, i.e over $330 million and that sets Nigeria as a pace-setter with such capital base in Africa, comparable to countries like Ghana, South Africa, Egypt, Algeria, and Ethiopia, when expressed in dollars. 📌This will further catalyze the Nigerian economy to achieve its $1 trillion valuation target by 2030 as mentioned earlier this year by Olayemi Cardoso . 📌In essence, at the end of this exercise, which is expected to occur through any of the following ways; 📝Issuing new shares, 📝Mergers and acquisitions, or 📝license downgrades. 📍The outcome will yield a robust banking sector capable of funding all SME and business segments of the economy. 📌The journey is tough right now, and it’s basically looking more like the survival of the fittest for Banks, but the endpoint will be rewarding…Central Bank of Nigeria 🇳🇬 Copied.......