Moody’s investors service has said banking sector outlooks for Nigeria, Kenya and Egypt are stable. In fact, it changed Nigeria’s rating from a previous negative to now stable.
It however said, outlooks for South Africa are negative.
Moody’s said, stable outlooks are supported by economic recoveries in the wake of the pandemic in the wake of the pandemic and that operating conditions vary across the continent and this is reflected in the different banking system outlooks published today.
“We have changed our outlook for the Nigerian banking sector to stable from negative to reflect our expectations of stronger economic activity over the coming 18 months, which will boost banks’ business volumes and earnings, and help to protect their loan performance from further deterioration,” said Peter Mushangwe, Assistant Vice President-Analyst at Moody’s.
Kenya’s banking system was also assigned, for the first time, a stable outlook on expectations that a recovering economy will enable banks’ loan quality and profitability to rebound from weakened levels, while capital, funding and liquidity will remain strong. High problem loans are the main credit challenge facing Kenyan banks but these will drop closer to pre-pandemic levels over the next 12 to 18 months.
Moody’s maintains a stable outlook for Egypt’s banking sector as continued infrastructure investments and robust spending will support economic growth, while initiatives to deepen financial inclusion will provide ample business opportunities for banks.
