Some local banks are to visit to the Middle East this month to source investors in a bid to bring in foreign funding, Central Bank (CB) officials said. “The Central Bank is planning a road show to Oman and Qatar for the local banks on the 14th and 15th December,” a CB official told the Business Times, adding that the CB plans to allow swap contract up to a year to ease foreign exchange risk during the early stages of sourcing these funds.
The official also added that short term swaps would also be granted to banks which want to convert dollars. “We want to canvass foreign funds as resources within the country aren't enough to support growth, which is why we want larger banks to raise around US$ 250 million whilst smaller banks could obtain around US$100 million," he added.
The Nations Trust Bank (NTB) is already in talks with foreign parties in a bid to raise funds for their tier two capital, which is capital that can absorb losses in the event of a bank winding-up.
The CB in the past has highlighted the importance of banks to assess their business models in the face of the global and local economic challenges in a bid to reposition the banking sector. While reiterating that ratings the banks get need to be leveraged to attract foreign funding, the CB official said that there’s a limit to how much capital banks can raise through rights issues. |
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