Listed banks in Saudi Arabia reported a healthy 14-percent rise in aggregate net profit before Zakat (a form of almsgiving) and tax to SR 4.02 billion in March 2021, against SR 3.53 billion recorded a year earlier, according to official data released by the Saudi Central Bank (SAMA). The figures relate to 11 listed Saudi banks as well as some foreign banks operating in the Kingdom. The group’s total assets also experienced sound growth of more than 11 percent annually to SR 3.035 trillion in March, while combined deposits rose by 9 percent to SR 1.980 trillion. Private-sector loans, meanwhile, increased by 15 percent year-on-year to SR 1.871 trillion.
In compliance with new banking laws, Egyptian lenders have now started to increase their capital levels. According to Banking Law No 194 of 2020, the minimum capital for banks operating in the Egyptian market should now be EGP 5 billion (US$320 million), which is a substantial increase from the EGP 500 million previously required. The capital for foreign bank branches, meanwhile, has been raised to $150 million from $50 million. The increases have been implemented to strengthen Egyptian banks’ capital bases in a bid to ensure they can withstand potential risks and bolster their ability to compete with other banks, both regionally and globally.
The law took effect on September 15, 2020, but according to Article 4 of the law, banks have up to one year from its implementation to make adjustments accordingly. That said, the Central Bank of Egypt (CBE) may extend this period for two years in some cases, meaning that the transition for lenders could range from one to three years in total.
Iran’s chief nuclear negotiator, Deputy Foreign Minister Abbas Araghchi, recently confirmed that Tehran expects US sanctions on key Iranian industries—banking included—to be lifted following productive talks between the parties in Vienna. “Sanctions…on Iran’s energy sector, which include oil and gas, or those on the automotive industry, financial, banking and port sanctions, all should be lifted based on agreements reached so far,” Araghchi was quoted as saying by Iranian state media. US President Joe Biden is reportedly seeking to return to the nuclear deal agreed with Iran under the Obama Administration.
Nigerian banks earned a total of N216.52 billion (US$567 million) from their e-business activities last year, with the country’s Tier-1 lenders—First Bank, UBA (United Bank for Africa), Access Bank, GT (Guaranty Trust) Bank and Zenith Bank—leading the way. According to business-news outlet Nairametrics, their e-business earnings for 2020 were almost identical to the N217 billion in income from digital channels the same banks recorded in 2019. Nairametrics also stated that the COVID-19 pandemic played a major role in bank performance, as it affected the expansion of the digital-rollout plans earlier on in the year. “However, the pandemic will swing in their favour as Nigerians increasingly relied on mobile banking for transactions while avoiding banking halls for fear of contracting Covid-19,” the publication reported.
Kenyan banks are continuing to struggle to shake off the impacts of the pandemic, with lenders largely reporting a decline in profits during the year thus far. According to recent data from the Central Bank of Kenya (CBK), banks’ profits before tax declined to Sh15.3 billion (US$142 million) at the end of February. This is significantly lower than the Sh24.7 billion lenders generated in the same month in 2020. It also marks the lowest profitability for the Kenyan banking sector in more than five years and thus strongly suggests that COVID-19 continues to affect banks’ bottom lines in the East African nation.
The outlook appears to be more upbeat in Ghana, however, where the country’s central bank recently confirmed that total banking-sector assets had climbed 18.5 percent annually to GHS 152 billion (US$26.3 billion) as of the end of February 2021. This is marginally higher than the 17.8-percent annual growth recorded 12 months earlier and is attributable mainly to banks’ investment holdings, which outpaced other sectors as lenders placed more of their holdings in government-debt instruments in response to the pandemic-induced elevated credit risks. As such, investments soared by 45.9 percent to GHS 67.9 billion, which dwarves the 7.2-percent growth recorded the previous year.
As for South Africa, the outlook is decidedly more mixed. According to S&P Global Market Intelligence, the country’s four largest banks may well yet receive an earnings boost this year as they reverse some of the ZAR 75.4 billion (US$5.27 billion) in impairments they took in 2020. But their returns on equity (ROE) are likely to remain subdued, thanks mainly to the tepid ongoing economic growth being generated. Nonperforming loans at the major banks—Standard Bank, FirstRand, ABSA Group and Nedbank Group—have gradually risen over the past five years, during which time unemployment reached an all-time record.

 
 
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