OVER E177M LOSS FOR CBE

MBABANE - The Central Bank of Eswatini (CBE) has made a loss of E177.6 million in the 2019/20 financial year.

This is a complete shift from the E190.1 million profit registered the previous financial year. The credit impairment losses are said to be the major contributors to the loss incurred. This is as per the CBE Integrated Report for the year ended March 31, 2020, which has just been released. According to the report, operating expenses were higher than the previous year. Property occupation expenses of E2.7 million were committed for rewiring of the Umntsholi and Imfumbe Building. Another E1.5 million was committed for replacing lifts at the Umntsholi building.

Assessment

Credit impairment losses amounted to E274 million as loans to government were impaired after assessment, the report revealed. “After assessment of government fiscal challenges, it was felt that there is high probability that government will fail to honour the E274 million of the E2.95 billion outstanding CBE advance to government. “A mitigation measure in place is minimisation of the Bank advance to government,” highlighted the report. Devaluation of commercial and residential property in the last quarter of the financial year and the impairment losses has resulted in the loss.

Worth mentioning is that the report covers the period ending when COVID-19 started to rear its ugly head in the country. The first case in the country was reported back on March 14 this year. In response to COVID-19 since the beginning of this year to September 2020, the CBE cut interest rates by a cumulative 275 basis points. Similarly, the liquidity requirement by 500 basis points to 20 per cent for commercial banks while  it was reduced by 400 basis points to 18 per cent for development banks.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: