Namibia: Our Money is Safe
 |
 |
|||||||||
|
||||||||||
|
|
|||||||||
|
||||||||||
Namibia Economist (Windhoek)
10 October 2008
Posted to the web 10 October 2008
Chamwe Kaira
Windhoek
When the US coughs, the rest of the world catches a cold, so they say.
The current financial crisis in the US has left a lot of Namibians worried, prompting them to panic. The Economist was this week inundated by people inquiring about the security of their deposits.
Bank Windhoek and Standard Bank, two of the four commercial banks in the country, spoke to the Economist and assured their customers that their money is safe.
The US financial crisis that blew up in September has caused a major financial crisis on Wall Street and other financial centres. Lehman Brothers, the fourth largest bank in the US, filed for bankruptcy protection. Merrill Lynch was taken over by the Bank of America.
The American International Group was thrown a financial lifeline, while Goldman Sachs and Morgan Stanley decided to convert themselves into commercial banks.
Chris Matthee, acting Managing Director of Bank Windhoek, told the Economist that the current events in the US do not have a direct impact on the Namibian banking industry and do not put depositors' money at risk.
"Namibian banks have to comply with very strict regulations which do not permit them to use deposits to fund foreign assets. In addition the limited foreign assets they may hold are subject to the highly restrictive exchange control regulations of the Common Monetary Area.
"Bank Windhoek and its unit trust funds consequently have no direct exposure whatsoever in the sub-prime market or in institutions which have exposure therein. The same isolation, which has limited opportunities for Namibian banks in the good times, is now protecting them from the aftermath of the sub-prime fall-out," he said.
He added that the Namibian banking sector, especially with regards to property finance, is vastly different from that of the US.
"Our banking law and prudential requirements for the banking industry, legal framework for collateral on property finance and lending policies that are far more conventional and conservative, ensure that credit risk are managed far more prudently than has been the case in the US," Matthee said.
On its part, the Standard Bank said it does not have the type of direct exposures that have caused the US banks so much distress.
"We remain soundly capitalized and have had no direct write-offs relating to the global credit crisis. Day-to-day business has continued as usual," the Standard Bank said.
It said it has not experienced any liquidity problems or large write-offs of any kind so far this year, "nor do we anticipate any occurring at this stage".
"Standard Bank Namibia's balance sheet is strong. We remain vigilant and conservative as regards the state of our lending book. This has a positive benefit in times of crisis such as this," the bank said.
On the other hand, Matthee said, greater integration of countries into global financial markets has increased the risk of contagion and to think that Namibia will completely escape the effects of the current crisis will, however, be wishful thinking.
"We have already seen the impact on our exchange rate and the negative impact on commodity prices. The impact that Namibia will experience will be the more gradual and long-term effect of a worldwide recession. Globally, economic growth estimates are being revised downwards including that of South Africa due to these problems emanating from the US, and the Namibian economic outlook is expected to follow suit," he said.
He added that, because of good financial performance over recent years and the reinvestment of profits, Namibian banks have a strong balance sheet and are well-capitalised.
"This, combined with responsible and prudent management, ensures that Namibian banks are well-positioned to weather the storm and to see through the recessionary times," Matthee said.
He said prudence will be required from all Namibians with lower consumer spending, lower credit extension and renewed focus on debt reduction and savings.When the US coughs, the rest of the world catches a cold, so they say.
The current financial crisis in the US has left a lot of Namibians worried, prompting them to panic. The Economist was this week inundated by people inquiring about the security of their deposits.
Relevant Links
Bank Windhoek and Standard Bank, two of the four commercial banks in the country, spoke to the Economist and assured their customers that their money is safe.
Read comments. Write your own.
|
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. | |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
Make allAfrica.com your home page
|
RSS Feed
Sign up for FREE daily 'top headlines' by email >> | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Top | Site Guide | Who We Are | Advertising | Search | My Account | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Questions or Comments? Contact us. Read our Privacy Statement. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
