Fitch downgrades Afreximbank to one notch above 'junk'
The one-notch downgrade to BBB- comes as the African lender battles to protect its loans from restructuring in Ghana, Zambia and Malawi, claiming that as a multilateral lender it has preferred creditor status.
Fitch pegged Afreximbank's non-performing loans at above 6%, while the bank itself reported an NPL ratio of 2.44% in the first half.
"The revision of risk management to 'weak' reflects low transparency in the recent reporting of loan performance relative to multilateral development bank peers and that Fitch's definition of NPLs differs from the bank's approach, which makes use of flexibilities offered by IFRS 9," Fitch said.
A lower credit rating can increase the borrowing cost for an issuer, which can in turn impact how much they can lend and at what rates.
Fitch attributed the negative outlook, which effectively puts the bank on downgrade watch, to the risk that some of its debt to sovereign borrowers might be included in restructuring.
"This would put pressure on our assessment of the bank's policy importance and heighten the risk associated with its strategy," Fitch said.
Afreximbank did not immediately comment on the downgrade.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
27 minutes ago
- Telegraph
Hurrah for the Gen Z youngsters who are taking up drinking
In recent years, my generation (I'm in my 40s) has looked askance at people in their late teens and twenties with their obsession with TikTok, baffling love of grey tracksuits and, worst of all, their refusal to indulge themselves alcoholically. This is especially concerning for Britain's beleaguered drinks industry, which has been reeling from lockdown, tax rises and over-regulation. But could there be light at the end of the tunnel? A new survey from IWSR, a market research company, suggests that Generation Z, those born between 1997 and 2012, aren't as alcohol-phobic as first thought. It suggests that young people weren't abstaining because they're glued to their phones, obsessed with their physical health or worried about making fools of themselves on social media. It's for the good old-fashioned reason of not being able to afford a pint or a G&T down the pub. The problem is that wages have not kept pace with prices. When I first moved to London in 2000, a pint was £2.50 and my first proper job as an assistant at a publisher paid £17,500. I spent most of my twenties in the Golden Heart in Commercial Street rather than in my cramped flat. Today, a similar job will pay £28,000 or less, but it's rare to find a pint under £6. No wonder younger people aren't drinking or going out as we used to, especially as so many places close early to save on energy and staffing costs. Now, as more youngsters come into the workplace and inflation is levelling off, it seems that they have belatedly discovered, just as their ancestors did, the joys of alcohol. Too bloody right. Your twenties are a great time to spend in a boozy haze, making friends, falling into romantic entanglements and not worrying about the future. Perhaps youngsters will give up their apps and return to dating the traditional way: by snogging someone in a bar after a few too many Bacardi Breezers. If you're not boozing during that time, what's the point of being young? The survey showed that 76 per cent of British Gen Zedsters have drunk alcohol in the past six months compared with 66 per cent two years ago. For comparison, it's 79 per cent for my generation. It turns out we aren't so different after all. This is a pattern that is repeated all over the world. Richard Halstead, the head of consumer insights at IWSR, explained: 'The idea that Gen Z drinkers are somehow fundamentally different from other age groups isn't supported by the evidence. For instance, we know that beverage alcohol consumption correlates with disposable income, and Gen Z came of age during a cost-of-living crisis.' For years the drinks industry, faced with falling demand, has pushed for premiumisation – in other words, getting the remaining drinkers to pay more for their booze. Combined with that, many have moved into zero-alcohol drinks like Diageo did with Seedlip – essentially charging through the nose for soft drinks. But if the results of this survey are anything to go by, the main problem with getting young people into pubs or bars isn't some generational crisis; it's affordability. Get the price right and they will come, as Tim Martin has long known. My local Wetherspoons is packed with youngsters on the weekend. Maybe the kids are alright after all.
The Independent
34 minutes ago
- The Independent
Rachel Reeves says ‘I was upset but today's a new day' after Commons tears
Chancellor Rachel Reeves was visibly upset during Prime Minister's Questions on Wednesday, stating the next day it was a "personal issue" she would not elaborate on. Despite the emotional moment, Ms Reeves insisted she was "cracking on with the job" when she appeared publicly on Thursday to launch the NHS 10-year plan. 'People saw I was upset, but that was yesterday. Today's a new day,' she said. Keir Starmer publicly defended Ms Reeves, acknowledging he had not fully appreciated her distress during the fast-paced PMQs. The chancellor's emotional display, alongside a £5 billion deficit in spending plans, initially unsettled financial markets, though government bonds rallied and the pound steadied after reassurances about her position. While Labour colleagues defended her, some Conservatives criticised her public show of emotion, suggesting it was inappropriate for a senior leader.
The Guardian
an hour ago
- The Guardian
Reeves's fearsome challenge: to balance backbenchers and bond markets
It was Bill Clinton's political adviser James Carville, way back in the 1990s, who said that in another life he would like to 'come back as the bond market' – in preference to a president or a pope – because 'you can intimidate everybody'. Even Donald Trump, that most wilful of politicians, has been forced to retreat in the face of bond market moves in recent months, ditching the most extreme of his 'reciprocal' tariffs after US Treasury yields jumped. And despite the traditional status of US Treasuries (government bonds) as a safe haven for global investors, it is still not clear how well financial markets will be able to swallow the $3.3tn increase in debt coming down the tracks if Trump's 'big beautiful bill' is passed. So when investors dumped gilts (UK government bonds) on Wednesday, as Rachel Reeves wept in the Commons, it was an abrupt reminder that Labour backbenchers were not the only audience the government must placate. Like many other major economies hit by a succession of shocks in recent years, the UK's relatively large debt pile means policymakers have to keep one eye on the markets they are relying on to fund their borrowing. And some analysts argue that the UK appears particularly vulnerable to crises of investor confidence, after the Liz Truss debacle of 2022. Given this backdrop, Reeves's team have always said their strict fiscal rules are not 'self-imposed' but there to prevent the government running up against the real-world constraints of the bond markets. As the chancellor put it in a recent speech, 'it is not me 'imposing' borrowing limits on government. Those limits are the product of economic reality.' Wednesday bond market moves supported her point, with the yield (in effect the interest rate) on government debt ticking up, as Keir Starmer appeared to hesitate in giving the chancellor his full backing. The market move suggested that, while Reeves may have lost credibility with Labour backbenchers after what many see as catastrophic misjudgments over winter fuel and welfare cuts, she does, apparently, retain the confidence of the bond markets. That matters, because this Labour government is operating in a very different, much more constrained fiscal environment than its predecessors. Government debt in the UK was running at about 30% of GDP in the early 00s, when Tony Blair was prime minister. Then came the global financial crisis, prompting multibillion-pound bailouts and a deep recession, and more than doubling the debt-to-GDP ratio to 70% by the time Labour left office. The decade and a half since has been marked by sickly economic growth, and another two 'once in a lifetime' economic shock: Covid, and the energy crisis prompted by Russia's invasion of Ukraine. Government debt is now close to 90% of GDP and is heading higher. The interest on that has cost the taxpayer more than £100bn in the last fiscal year – as much as 8% of public spending. In other words, what appear to be tiny moves in interest rates, if sustained, can cost taxpayers billions. The fact that Reeves's 'headroom' against her fiscal rules evaporated between the autumn budget and March's spending review was caused more by rising interest rates on government debt than a slowing economy – and this was driven as much by global events, including US tariffs chaos, as by decisions at home. Reeves hopes the squeeze on the public finances will ease as economic growth picks up – but that feels challenging, given the highly uncertain international context and the unavoidably long-term nature of many of Labour's pro-growth policies. By Thursday, the jump in gilt yields had partly reversed, after Starmer made clear Reeves continued to have his backing – perhaps not surprisingly, as there is scant evidence he wants to abandon her broad approach. Some of the chancellor's allies argue that she has emerged strengthened for the internal rows ahead, because she can point to investors' jitters to show there are limits to what the markets will tolerate. But after this week's welfare climbdown, her autumn budget looks like a fearsomely difficult balancing act, between restive backbenchers and sceptical investors.
